Aurora Mobile Limited’s (NASDAQ:JG): Aurora Mobile Limited provides mobile big data solutions platform in the People’s Republic of China. The US$721m market-cap company’s loss lessens since it announced a -CN¥116.7m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -CN¥106.1m, as it approaches breakeven. As path to profitability is the topic on JG’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for JG.
According to the industry analysts covering JG, breakeven is near. They expect the company to post a final loss in 2018, before turning a profit of CN¥91m in 2019. JG is therefore projected to breakeven around a few months from now. How fast will JG have to grow each year in order to reach the breakeven point by 2019? Working backwards from analyst estimates, it turns out that they expect the company to grow 121% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, JG may become profitable much later than analysts predict.
Underlying developments driving JG’s growth isn’t the focus of this broad overview, however, take into account 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 I would like to bring into light with JG is its debt-to-equity ratio of 141%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and JG has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
There are too many aspects of JG to cover in one brief article, but the key fundamentals for the company can all be found in one place – JG’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should look at:
- Valuation: What is JG 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 JG 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 Aurora Mobile’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 past 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. For errors that warrant correction please contact the editor at email@example.com.