Market Sentiment Around Loss-Making Inseego Corp (NASDAQ:INSG)

Inseego Corp’s (NASDAQ:INSG): Inseego Corp., together with its subsidiaries, provides software-as-a-service (SaaS), Internet of Things (IoT), and mobile solutions worldwide. The US$277m market-cap posted a loss in its most recent financial year of -US$46m and a latest trailing-twelve-month loss of -US$8m shrinking the gap between loss and breakeven. As path to profitability is the topic on INSG’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for INSG’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for Inseego

According to the industry analysts covering INSG, breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$7m in 2020. INSG is therefore projected to breakeven around a few months from now. How fast will INSG have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 80% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGS:INSG Past Future Earnings November 8th 18
NasdaqGS:INSG Past Future Earnings November 8th 18

Underlying developments driving INSG’s growth isn’t the focus of this broad overview, but, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one issue worth mentioning. INSG currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

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

  1. Valuation: What is INSG 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 INSG 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 Inseego’s board and the CEO’s back ground.
  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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.