With the business potentially at an important milestone, we thought we'd take a closer look at AvidXchange Holdings, Inc.'s (NASDAQ:AVDX) future prospects.  AvidXchange Holdings, Inc. provides accounts payable (AP) automation software and payment solutions for middle market businesses and their suppliers in North America.    With the latest financial year loss of US$47m and a trailing-twelve-month loss of US$32m, the US$2.3b market-cap company alleviated its loss by moving closer towards its target of breakeven.    The most pressing concern for investors is AvidXchange Holdings' path to profitability – when will it breakeven?  We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

According to the 14 industry analysts covering AvidXchange Holdings, the consensus is that breakeven is near.   They anticipate the company to incur a final loss in 2024, before generating positive profits of US$32m in 2025.   The company is therefore projected 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 70% year-on-year, on average,    which is extremely buoyant.  If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.  

NasdaqGS:AVDX Earnings Per Share Growth May 14th 2024

We're not going to go through company-specific developments for AvidXchange Holdings given that this is a high-level summary,  but,  bear in mind  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'd like to point out is that  The company has managed its capital prudently,  with debt making up 11% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.    

Next Steps:

There are key fundamentals of AvidXchange Holdings which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at AvidXchange Holdings, take a look at AvidXchange Holdings' company page on Simply Wall St. We've also put together a list of  pertinent  aspects  you should further research:

1. Historical Track Record: What has AvidXchange Holdings' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on AvidXchange Holdings' 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.