Stock Analysis

When Will IZEA Worldwide, Inc. (NASDAQ:IZEA) Become Profitable?

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NasdaqCM:IZEA
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With the business potentially at an important milestone, we thought we'd take a closer look at IZEA Worldwide, Inc.'s (NASDAQ:IZEA) future prospects. IZEA Worldwide, Inc., together with its subsidiaries, creates and operates online marketplaces that connect marketers and content creators. The US$263m market-cap company announced a latest loss of US$10m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on IZEA Worldwide'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.

Check out our latest analysis for IZEA Worldwide

According to some industry analysts covering IZEA Worldwide, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$300k in 2022. So, the company is predicted to breakeven just over a year from today. 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 112%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
NasdaqCM:IZEA Earnings Per Share Growth April 6th 2021

We're not going to go through company-specific developments for IZEA Worldwide given that this is a high-level summary, however, keep in mind that generally 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 6.1% 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 IZEA Worldwide, so if you are interested in understanding the company at a deeper level, take a look at IZEA Worldwide's company page on Simply Wall St. We've also put together a list of essential factors you should further research:

  1. Historical Track Record: What has IZEA Worldwide'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 IZEA Worldwide'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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What are the risks and opportunities for IZEA Worldwide?

IZEA Worldwide, Inc., together with its subsidiaries, creates and operates online marketplaces that connect marketers and content creators.

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Rewards

  • Earnings are forecast to grow 184.77% per year

  • Earnings have grown 4% per year over the past 5 years

Risks

  • Does not have a meaningful market cap ($41M)

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