Midwest Holding Inc.'s (NASDAQ:MDWT) Has Found A Path To Profitability

Midwest Holding Inc. (NASDAQ:MDWT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Midwest Holding Inc., a financial services holding company, engages in underwriting and marketing life insurance products in the United States. The US$202m market-cap company posted a loss in its most recent financial year of US$5.7m and a latest trailing-twelve-month loss of US$2.3m shrinking the gap between loss and breakeven. As path to profitability is the topic on Midwest Holding's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Midwest Holding

Midwest Holding is bordering on breakeven, according to the 2 American Insurance analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$7.1m in 2021. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 123% 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.

We're not going to go through company-specific developments for Midwest Holding given that this is a high-level summary, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Midwest Holding has no debt on its balance sheet, which is quite unusual for a cash-burning 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 Midwest Holding to cover in one brief article, but the key fundamentals for the company can all be found in one place – Midwest Holding's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:

1. Historical Track Record: What has Midwest Holding's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Midwest Holding'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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