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Boingo Wireless, Inc. (NASDAQ:WIFI): Is Breakeven Near?

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Boingo Wireless, Inc.'s (NASDAQ:WIFI): Boingo Wireless, Inc., together with its subsidiaries, provides wireless connectivity solutions for smartphones, tablets, laptops, wearables, and other wireless-enabled consumer devices worldwide. The US$935m market-cap posted a loss in its most recent financial year of -US$1.2m and a latest trailing-twelve-month loss of -US$3.1m leading to an even wider gap between loss and breakeven. Many investors are wondering the rate at which WIFI 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 WIFI.

See our latest analysis for Boingo Wireless

According to the 9 industry analysts covering WIFI, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$3.3m in 2021. So, WIFI is predicted to breakeven approximately 2 years from now. What rate will WIFI 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 76%, which is rather optimistic! If this rate turns out to be too aggressive, WIFI may become profitable much later than analysts predict.

NasdaqGS:WIFI Past and Future Earnings, May 11th 2019

I’m not going to go through company-specific developments for WIFI given that this is a high-level summary, though, bear 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.

Before I wrap up, there’s one issue worth mentioning. WIFI currently has a debt-to-equity ratio of 199%. Typically, debt shouldn’t exceed 40% of your equity, and WIFI has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of WIFI 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 WIFI, take a look at WIFI’s company page on Simply Wall St. I’ve also compiled a list of important factors you should look at:

  1. Valuation: What is WIFI 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 WIFI 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 Boingo Wireless’s board and the CEO’s back ground.
  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.