Loss-Making SRAX, Inc. (NASDAQ:SRAX) Set To Breakeven

With the business potentially at an important milestone, we thought we'd take a closer look at SRAX, Inc.'s (NASDAQ:SRAX) future prospects. SRAX, Inc., a technology company, focused on enhancing communications between public companies and their shareholders and investors in the United States. The US$62m market-cap company’s loss lessened since it announced a US$9.7m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$2.5m, as it approaches breakeven. The most pressing concern for investors is SRAX's path to profitability – when will it 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 SRAX

SRAX is bordering on breakeven, according to some American Software analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$3.5m in 2023. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 111% 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 SRAX's growth isn’t the focus of this broad overview, but, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 20% of equity. This means that it 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 SRAX to cover in one brief article, but the key fundamentals for the company can all be found in one place – SRAX's company page on Simply Wall St. We've also compiled a list of essential factors you should look at:

1. Valuation: What is SRAX 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 SRAX 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 SRAX’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. 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. Simply Wall St has no position in any stocks mentioned.