Meltwater B.V. (OB:MWTR): Is Breakeven Near?

We feel now is a pretty good time to analyse Meltwater B.V.'s (OB:MWTR) business as it appears the company may be on the cusp of a considerable accomplishment. Meltwater B.V., an online media monitoring company, provides media intelligence and social analytics software-as-a-service solutions worldwide. The kr15b market-cap company announced a latest loss of US$53m on 31 December 2019 for its most recent financial year result. The most pressing concern for investors is Meltwater B.V's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Meltwater B.V

According to the 3 industry analysts covering Meltwater B.V, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$14m in 2022. So, the company is predicted 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 65% is expected, which is extremely buoyant. 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 Meltwater B.V given that this is a high-level summary, but, 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.

One thing we would like to bring into light with Meltwater B.V is it 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Valuation: What is Meltwater B.V 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 Meltwater B.V 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 Meltwater B.V’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. 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.
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