With the business potentially at an important milestone, we thought we'd take a closer look at Procore Technologies, Inc.'s (NYSE:PCOR) future prospects. Procore Technologies, Inc. provides a cloud-based construction management platform and related software products in the United States and internationally. On 31 December 2023, the US$11b market-cap company posted a loss of US$190m for its most recent financial year. The most pressing concern for investors is Procore Technologies' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 17 of the American Software analysts is that Procore Technologies is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$17m in 2026. So, the company is predicted to breakeven approximately 2 years from now. 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 43%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
NYSE:PCOR Earnings Per Share Growth February 19th 2024
Given this is a high-level overview, we won't go into details of Procore Technologies' upcoming projects, however, 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 Procore Technologies has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of 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 Procore Technologies, so if you are interested in understanding the company at a deeper level, take a look at Procore Technologies' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:
Valuation: What is Procore Technologies 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 Procore Technologies 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 Procore Technologies'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.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
