iClick Interactive Asia Group Limited’s (NASDAQ:ICLK): iClick Interactive Asia Group Limited, together with its subsidiaries, provides online marketing services in the People’s Republic of China, Hong Kong, and internationally. The company’s loss has recently broadened since it announced a -US$29.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$36.6m, moving it further away from breakeven. Many investors are wondering the rate at which ICLK will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for ICLK’s growth and when analysts expect the company to become profitable.
According to the 3 industry analysts covering ICLK, the consensus is breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of US$17m in 2020. So, ICLK is predicted to breakeven approximately 2 years from now. How fast will ICLK 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 95% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, ICLK may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for ICLK given that this is a high-level summary, though, bear 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. ICLK currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in ICLK’s case is 45%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are too many aspects of ICLK to cover in one brief article, but the key fundamentals for the company can all be found in one place – ICLK’s company page on Simply Wall St. I’ve also compiled a list of important factors you should look at:
- Historical Track Record: What has ICLK’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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on iClick Interactive Asia Group’s board and the CEO’s back ground.
- 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 firstname.lastname@example.org.