With the business potentially at an important milestone, we thought we'd take a closer look at Smith Micro Software, Inc.'s (NASDAQ:SMSI) future prospects. Smith Micro Software, Inc. engages in the development and sale of software to enhance the mobile experience to wireless and cable service providers in the Americas, Europe, the Middle East, and Africa. With the latest financial year loss of US$24m and a trailing-twelve-month loss of US$51m, the US$33m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Smith Micro Software's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Smith Micro Software

Smith Micro Software is bordering on breakeven, according to the 3 American Software analysts. They expect the company to post a final loss in 2026, before turning a profit of US$9.0m in 2027. Therefore, the company is expected to breakeven roughly 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 85% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Smith Micro Software's growth isn’t the focus of this broad overview, though, take into account that by and large 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 aspect worth mentioning. Smith Micro Software 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. 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:

There are too many aspects of Smith Micro Software to cover in one brief article, but the key fundamentals for the company can all be found in one place – Smith Micro Software's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

1. Valuation: What is Smith Micro Software 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 Smith Micro Software 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 Smith Micro Software’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.