Sonim Technologies, Inc.'s (NASDAQ:SONM) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at Sonim Technologies, Inc.'s (NASDAQ:SONM) future prospects. Sonim Technologies, Inc. provides ruggedized mobile phones and accessories for task workers. The company’s loss has recently broadened since it announced a US$26m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$32m, moving it further away from breakeven. Many investors are wondering about the rate at which Sonim Technologies will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Sonim Technologies

Consensus from 3 of the American Tech analysts is that Sonim Technologies is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of US$7.4m in 2023. The company is therefore projected to breakeven around 3 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 63%, which is extremely buoyant. 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 Sonim Technologies' upcoming projects, however, keep 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.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 1.2% 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:

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

1. Valuation: What is Sonim Technologies 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 Sonim Technologies 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 Sonim Technologies’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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