Analysts Expect Gaia, Inc. (NASDAQ:GAIA) To Breakeven Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Gaia, Inc.'s (NASDAQ:GAIA) future prospects. Gaia, Inc. operates a digital video subscription service and online community for underserved member base worldwide. The US$183m market-cap company posted a loss in its most recent financial year of US$18m and a latest trailing-twelve-month loss of US$2.6m shrinking the gap between loss and breakeven. As path to profitability is the topic on Gaia's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Gaia

Consensus from 4 of the American Entertainment analysts is that Gaia is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of US$304k in 2020. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 103% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Gaia's growth isn’t the focus of this broad overview, though, keep in mind 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’d like to point out is that The company has managed its capital judiciously, with debt making up 5.4% 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 Gaia, so if you are interested in understanding the company at a deeper level, take a look at Gaia's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

1. Historical Track Record: What has Gaia'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 Gaia'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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