Synacor Inc’s (NASDAQ:SYNC): Synacor, Inc. operates as a technology development, multiplatform services, and revenue partner for video, Internet, and communications providers; and device manufacturers, governments, and enterprises. With the latest financial year loss of -US$9.78m and a trailing-twelve month of -US$5.50m, the US$79.53m market-cap alleviates its loss by moving closer towards its target of breakeven. Many investors are wondering the rate at which SYNC will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for SYNC.
According to the industry analysts covering SYNC, breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$5.60m in 2020. So, SYNC is predicted to breakeven approximately a few months from now. How fast will SYNC have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 69.41% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, SYNC may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for SYNC given that this is a high-level summary, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that SYNC has managed its capital prudently, with debt making up 9.42% of equity. This means that SYNC has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of SYNC which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at SYNC, take a look at SYNC’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further examine:
- Valuation: What is SYNC 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 SYNC 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 Synacor’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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.