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eServGlobal Limited's (ASX:ESV): eServGlobal Limited provides telecommunications software solutions to mobile and financial service providers in the Middle East, the Asia Pacific, Europe, Africa, and Central and South America. On 31 December 2018, the AU$120m market-cap posted a loss of -AU$19.9m for its most recent financial year. Many investors are wondering the rate at which ESV will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for ESV, its year of breakeven and its implied growth rate.

See our latest analysis for eServGlobal

ESV is bordering on breakeven, according to Software analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of AU$1.8m in 2020. So, ESV is predicted to breakeven approximately a few months from now. What rate will ESV have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 99%, which signals high confidence from analysts. If this rate turns out to be too aggressive, ESV may become profitable much later than analysts predict.

Given this is a high-level overview, I won’t go into details of ESV’s upcoming projects, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. ESV currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. ESV 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:

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

1. Historical Track Record: What has ESV's 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 eServGlobal’s board and the CEO’s back ground.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.