iClick Interactive Asia Group Limited (NASDAQ:ICLK): Is Breakeven Near?

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$29.66M loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$37.32M, 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?” I’ve put together a brief outline of industry analyst expectations for ICLK, its year of breakeven and its implied growth rate.

ICLK is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2017, before turning a profit of US$429.50K in 2018. So, ICLK is predicted to breakeven approximately a few months from now. What rate will ICLK 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 102.47%, which is extremely buoyant. If this rate turns out to be too aggressive, ICLK may become profitable much later than analysts predict.

Underlying developments driving ICLK’s growth isn’t the focus of this broad overview, 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 I would like to bring into light with ICLK is its 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 76.26%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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 put together a list of pertinent factors you should further examine:

1. Valuation: What is ICLK 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 ICLK 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 iClick Interactive Asia Group’s board and the CEO’s back ground.
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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.