With the business potentially at an important milestone, we thought we'd take a closer look at Zhihu Inc.'s (NYSE:ZH) future prospects. Zhihu Inc. operates an online content community in the People’s Republic of China. The US$302m market-cap company posted a loss in its most recent financial year of CN¥844m and a latest trailing-twelve-month loss of CN¥362m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Zhihu will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Zhihu

According to the 7 industry analysts covering Zhihu, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of CN¥115m in 2026. The company is therefore projected to breakeven just over a year from today. 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 80% is expected, 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 Zhihu given that this is a high-level summary, though, take into account that typically 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 1.2% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Zhihu 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 Zhihu 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 Zhihu’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.