Paysafe Limited (NYSE:PSFE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Paysafe Limited provides digital commerce solutions to online businesses, SMB merchants, and consumers through its Paysafe Network worldwide. The company’s loss has recently broadened since it announced a US$127m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$205m, moving it further away from breakeven. Many investors are wondering about the rate at which Paysafe will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Paysafe

Paysafe is bordering on breakeven, according to the 9 American IT analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$84m in 2022. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 116% is expected, 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 Paysafe's growth isn’t the focus of this broad overview, though, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. Paysafe currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Paysafe's case is 84%. 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 Paysafe to cover in one brief article, but the key fundamentals for the company can all be found in one place – Paysafe's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Valuation: What is Paysafe 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 Paysafe 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 Paysafe’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.

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.

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