Breakeven On The Horizon For Rimini Street, Inc. (NASDAQ:RMNI)

With the business potentially at an important milestone, we thought we'd take a closer look at Rimini Street, Inc.'s (NASDAQ:RMNI) future prospects. Rimini Street, Inc. provides enterprise software products, services, and support for various industries. On 31 December 2020, the US$678m market-cap company posted a loss of US$14m for its most recent financial year. Many investors are wondering about the rate at which Rimini Street will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Rimini Street

According to the 5 industry analysts covering Rimini Street, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.9m in 2022. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 88% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Rimini Street given that this is a high-level summary, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Rimini Street is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of Rimini Street which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Rimini Street, take a look at Rimini Street's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

1. Valuation: What is Rimini Street 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 Rimini Street 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 Rimini Street’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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