SITO Mobile Ltd's (NASDAQ:SITO) Path To Profitability

SITO Mobile Ltd's (NASDAQ:SITO): SITO Mobile, Ltd. provides advertisement delivery, measurement and attribution, and consumer insights using its proprietary location-based marketing intelligence platform in the United States and Canada. The company’s loss has recently broadened since it announced a -US$14.67m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$16.81m, moving it further away from breakeven. The most pressing concern for investors is SITO’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for SITO.

According to the industry analysts covering SITO, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$4.09m in 2022. SITO is therefore projected to breakeven around a few months from now. What rate will SITO 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 53.62%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, I won’t go into details of SITO’s upcoming projects, however, bear in mind that typically 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 SITO has managed its capital prudently, with debt making up 0.08% of equity. This means that SITO has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of SITO to cover in one brief article, but the key fundamentals for the company can all be found in one place – SITO’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should look at:

1. Valuation: What is SITO 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 SITO 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 SITO Mobile’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.