Breakeven On The Horizon For Oblong Inc. (NYSEMKT:OBLG)

Oblong Inc. (NYSEMKT:OBLG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Oblong, Inc. provides multi-stream collaboration technologies and managed services for video collaboration and network applications in the United States and internationally. The company’s loss has recently broadened since it announced a US$7.8m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$14m, moving it further away from breakeven. As path to profitability is the topic on Oblong'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.

View our latest analysis for Oblong

According to some industry analysts covering Oblong, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$8.3m in 2023. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 69% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Oblong's growth isn’t the focus of this broad overview, but, bear in mind 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 we wrap up, there’s one issue worth mentioning. Oblong currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Oblong's case is 60%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Oblong 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 Oblong, take a look at Oblong's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Historical Track Record: What has Oblong'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 Oblong'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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