Quantum Corporation (NASDAQ:QMCO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Quantum Corporation provides products for storing and managing digital video and unstructured data in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The US$425m market-cap company announced a latest loss of US$35m on 31 March 2021 for its most recent financial year result. The most pressing concern for investors is Quantum's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 5 industry analysts covering Quantum, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$8.6m in 2022. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 134% 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.
Underlying developments driving Quantum's growth isn’t the focus of this broad overview, but, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Quantum is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
This article is not intended to be a comprehensive analysis on Quantum, so if you are interested in understanding the company at a deeper level, take a look at Quantum's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:
- Valuation: What is Quantum 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 Quantum is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Quantum’s board and the CEO’s background.
- 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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