Informatica Inc. (NYSE:INFA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Informatica Inc. develops an artificial intelligence-powered platform that connects, manages, and unifies data across multi-cloud, hybrid systems at enterprise scale in the United States. The US$5.8b market-cap company posted a loss in its most recent financial year of US$100m and a latest trailing-twelve-month loss of US$97m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Informatica 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.

View our latest analysis for Informatica

Informatica is bordering on breakeven, according to the 12 American Software analysts. They expect the company to post a final loss in 2022, before turning a profit of US$48m in 2023. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 81%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Informatica given that this is a high-level summary, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there's one issue worth mentioning. Informatica currently has a relatively high level of debt. Typically, debt shouldn't exceed 40% of your equity, which in Informatica's case is 93%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Informatica to cover in one brief article, but the key fundamentals for the company can all be found in one place – Informatica'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 Informatica 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 Informatica 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 Informatica'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.