SurgePays, Inc. (NASDAQ:SURG) About To Shift From Loss To Profit

SurgePays, Inc. (NASDAQ:SURG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. SurgePays, Inc., a financial technology and telecommunications company, provides services to the underbanked community in the United States. The US$77m market-cap company’s loss lessened since it announced a US$14m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$11m, as it approaches breakeven. As path to profitability is the topic on SurgePays' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for SurgePays

Consensus from 2 of the American Wireless Telecom analysts is that SurgePays is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$5.0m in 2023. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 166% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for SurgePays given that this is a high-level summary, however, keep in mind that typically 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. SurgePays currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has SurgePays' 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 SurgePays' 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.