When Can We Expect A Profit From SharpSpring Inc (NASDAQ:SHSP)?

SharpSpring Inc's (NASDAQ:SHSP): SharpSpring, Inc. operates as a cloud-based marketing technology company worldwide. With the latest financial year loss of -US$4.98m and a trailing-twelve month of -US$5.65m, the US$75.94m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on SHSP’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for SHSP, its year of breakeven and its implied growth rate.

SHSP is bordering on breakeven, according to Internet analysts. They expect the company to post a final loss in -1, before turning a profit of US$0 in . Therefore, SHSP is expected to breakeven roughly a few months from now. What rate will SHSP 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 19.99%, which is relatively reasonable. However, if this rate turns out to be too buoyant, SHSP may become profitable later than analysts predict.

Underlying developments driving SHSP’s growth isn’t the focus of this broad overview, however, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one issue worth mentioning. SHSP currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in SHSP’s case is 44.48%. 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 SHSP to cover in one brief article, but the key fundamentals for the company can all be found in one place – SHSP’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should further research:

1. Historical Track Record: What has SHSP'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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on SharpSpring’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.