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Gaia, Inc.’s (NASDAQ:GAIA): Gaia, Inc. operates a digital video subscription service and online community that caters underserved subscribers worldwide. The US$208m market-cap posted a loss in its most recent financial year of -US$23.7m and a latest trailing-twelve-month loss of -US$28.3m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on GAIA’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for GAIA’s growth and when analysts expect the company to become profitable.
According to the 4 industry analysts covering GAIA, the consensus is breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of US$2.4m in 2020. So, GAIA is predicted to breakeven approximately a few months from now. What rate will GAIA have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 74%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for GAIA given that this is a high-level summary, though, 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 I’d like to point out is that GAIA has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. GAIA currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
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. I’ve also compiled a list of important aspects you should further research:
- 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.
- 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 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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.