Synacor, Inc.'s (NASDAQ:SYNC) Profit Outlook

Synacor, Inc. (NASDAQ:SYNC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Synacor, Inc., a digital technology company, provides email and collaboration software, cloud-based identity management platforms, managed web and mobile portals, and advertising solutions in the United States and internationally. The company’s loss has recently broadened since it announced a US$9.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$12m, moving it further away from breakeven. As path to profitability is the topic on Synacor's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Synacor

According to the 3 industry analysts covering Synacor, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.0m in 2022. So, the company is predicted to breakeven just over a year from today. 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 76% year-on-year, on average, which signals high confidence from analysts. 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, we won’t go into details of Synacor's upcoming projects, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. Synacor currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Valuation: What is Synacor 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 Synacor 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 Synacor’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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