The OLB Group, Inc.'s (NASDAQ:OLB) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at The OLB Group, Inc.'s (NASDAQ:OLB) future prospects. The OLB Group, Inc. operates as a FinTech and payment facilitator company in the United States. The US$45m market-cap company posted a loss in its most recent financial year of US$1.3m and a latest trailing-twelve-month loss of US$1.8m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which OLB Group will turn a profit, with the big question being “when will the company breakeven?” 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 OLB Group

OLB Group is bordering on breakeven, according to the 2 American IT analysts. They expect the company to post a final loss in 2021, before turning a profit of US$580k in 2022. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 98% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving OLB Group's growth isn’t the focus of this broad overview, however, 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 we would like to bring into light with OLB Group is its debt-to-equity ratio of 147%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on OLB Group, so if you are interested in understanding the company at a deeper level, take a look at OLB Group's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is OLB Group 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 OLB Group 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 OLB Group’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. 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.
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