Tyro Payments Limited (ASX:TYR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Tyro Payments Limited provides payment solutions to merchants and business banking products to businesses in Australia. The AU$1.8b market-cap company announced a latest loss of AU$38m on 30 June 2020 for its most recent financial year result. The most pressing concern for investors is Tyro Payments' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Tyro Payments

Tyro Payments is bordering on breakeven, according to the 6 Australian IT analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$5.5m in 2023. The company is therefore projected to breakeven around 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 77% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict. earnings-per-share-growth

We're not going to go through company-specific developments for Tyro Payments given that this is a high-level summary, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Tyro Payments has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Tyro Payments, so if you are interested in understanding the company at a deeper level, take a look at Tyro Payments' company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

Valuation: What is Tyro Payments 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 Tyro Payments is currently mispriced by the market. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Tyro Payments’s board and the CEO’s background. 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.

This article by Simply Wall St is general in nature. 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.

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