We feel now is a pretty good time to analyse Similarweb Ltd.'s (NYSE:SMWB) business as it appears the company may be on the cusp of a considerable accomplishment. Similarweb Ltd. provides cloud-based digital intelligence solutions in the United States, Europe, the Asia Pacific, the United Kingdom, Israel, and internationally. The US$627m market-cap company announced a latest loss of US$29m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Similarweb will turn a profit, with the big question being "when will the company breakeven?" We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Similarweb is bordering on breakeven, according to the 6 American Software analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$1.2m in 2025. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 104% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Similarweb's growth isn't the focus of this broad overview, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Similarweb is its debt-to-equity ratio of 161%. Typically, debt shouldn't exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Similarweb to cover in one brief article, but the key fundamentals for the company can all be found in one place – Similarweb's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Valuation: What is Similarweb worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Similarweb is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Similarweb's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.