On Track Innovations Ltd’s (NASDAQ:OTIV): On Track Innovations Ltd. designs, develops, and markets cashless payment solutions. On 31 December 2017, the US$39.53M market-cap posted a loss of -US$1.68M for its most recent financial year. As path to profitability is the topic on OTIV’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for OTIV, its year of breakeven and its implied growth rate.
See our latest analysis for On Track Innovations Expectation from analysts is OTIV is on the verge of breakeven. They expect the company to post a final loss in 2018, before turning a profit of US$125.50K in 2019. So, OTIV is predicted to breakeven approximately a few months from now. What rate will OTIV 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 105.31%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving OTIV’s growth isn’t the focus of this broad overview, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one aspect worth mentioning. OTIV has managed its capital judiciously, with debt making up 40.12% of equity. This means that OTIV 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:
This article is not intended to be a comprehensive analysis on OTIV, so if you are interested in understanding the company at a deeper level, take a look at OTIV’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further research:
- Historical Track Record: What has OTIV’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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on On Track Innovations’s board and the CEO’s back ground.
- 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.