Breakeven Is Near for Taboola.com Ltd. (NASDAQ:TBLA)

With the business potentially at an important milestone, we thought we'd take a closer look at Taboola.com Ltd.'s (NASDAQ:TBLA) future prospects. Taboola.com Ltd., together with its subsidiaries, operates an artificial intelligence-based algorithmic engine platform in Israel, the United States, the United Kingdom, Germany, and internationally. The US$1.5b market-cap company announced a latest loss of US$82m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Taboola.com's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Taboola.com

According to the 6 industry analysts covering Taboola.com, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$20m in 2024. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 56%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Taboola.com given that this is a high-level summary, though, bear in mind that generally 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 The company has managed its capital judiciously, with debt making up 14% 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 Taboola.com, so if you are interested in understanding the company at a deeper level, take a look at Taboola.com's company page on Simply Wall St. We've also put together a list of important aspects you should look at:

1. Valuation: What is Taboola.com 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 Taboola.com 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 Taboola.com’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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.