monday.com Ltd. (NASDAQ:MNDY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. monday.com Ltd., together with its subsidiaries, develops software applications in the United States, Europe, the Middle East, Africa, and internationally. On 31 December 2023, the US$10b market-cap company posted a loss of US$1.9m for its most recent financial year. Many investors are wondering about the rate at which monday.com 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.

Consensus from 15 of the American Software analysts is that monday.com is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$44m in 2026. The company is therefore projected to breakeven around 2 years 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 7.3% is expected, which is a somewhat cautious outlook. If this rate turns out to be too low, the company may become profitable faster than analysts expect.

We're not going to go through company-specific developments for monday.com given that this is a high-level summary, though, keep in mind that by and large a low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there's one aspect worth mentioning. monday.com currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on monday.com, so if you are interested in understanding the company at a deeper level, take a look at monday.com's company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Valuation: What is monday.com 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 monday.com 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 monday.com'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.

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.