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Breakeven On The Horizon For ZoomInfo Technologies Inc. (NASDAQ:ZI)

Simply Wall St
·3 mins read

ZoomInfo Technologies Inc. (NASDAQ:ZI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ZoomInfo Technologies Inc. operates cloud-based go-to-market intelligence platform for sales and marketing teams in the United States and internationally. The US$13b market-cap company posted a loss in its most recent financial year of US$78m and a latest trailing-twelve-month loss of US$49m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which ZoomInfo 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.

See our latest analysis for ZoomInfo Technologies

According to the 14 industry analysts covering ZoomInfo Technologies, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$60m in 2021. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 115% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving ZoomInfo Technologies' growth isn’t the focus of this broad overview, but, 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.

Before we wrap up, there’s one issue worth mentioning. ZoomInfo Technologies currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in ZoomInfo Technologies' case is 90%. 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 ZoomInfo Technologies, so if you are interested in understanding the company at a deeper level, take a look at ZoomInfo Technologies' company page on Simply Wall St. We've also compiled a list of essential factors you should look at:

  1. Valuation: What is ZoomInfo 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 ZoomInfo 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 ZoomInfo 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.