We feel now is a pretty good time to analyse MeridianLink, Inc.'s (NYSE:MLNK) business as it appears the company may be on the cusp of a considerable accomplishment. MeridianLink, Inc., a software and services company, provides software solutions for banks, credit unions, mortgage lenders, specialty lending providers, and consumer reporting agencies in the United States. The US$1.4b market-cap company's loss lessened since it announced a US$31m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$18m, as it approaches breakeven. As path to profitability is the topic on MeridianLink's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for MeridianLink

According to the 8 industry analysts covering MeridianLink, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$12m in 2022. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 60%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving MeridianLink's growth isn't the focus of this broad overview, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with MeridianLink is its relatively high level of debt. Typically, debt shouldn't exceed 40% of your equity, which in MeridianLink's case is 74%. 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 key fundamentals of MeridianLink which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at MeridianLink, take a look at MeridianLink's company page on Simply Wall St. We've also put together a list of key aspects you should look at:

1. Valuation: What is MeridianLink 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 MeridianLink 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 MeridianLink'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.