Stock Analysis

IQGeo Group plc's (LON:IQG) Profit Outlook

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AIM:IQG
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IQGeo Group plc (LON:IQG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. IQGeo Group PLC, develops geospatial software to the telecoms and utility industries primarily in the United Kingdom, North America, Europe, and Japan. The UK£71m market-cap company announced a latest loss of UK£4.1m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on IQGeo Group's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for IQGeo Group

According to some industry analysts covering IQGeo Group, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of UK£2.5m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 82%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

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AIM:IQG Earnings Per Share Growth May 3rd 2021

Underlying developments driving IQGeo Group's growth isn’t the focus of this broad overview, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 3.3% 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 IQGeo Group, so if you are interested in understanding the company at a deeper level, take a look at IQGeo Group's company page on Simply Wall St. We've also put together a list of important aspects you should look at:

  1. Valuation: What is IQGeo Group 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 IQGeo Group 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 IQGeo Group’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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