Breakeven Is Near for Brightcove Inc. (NASDAQ:BCOV)
We feel now is a pretty good time to analyse Brightcove Inc.'s (NASDAQ:BCOV) business as it appears the company may be on the cusp of a considerable accomplishment. Brightcove Inc. provides cloud-based services for video. The US$684m market-cap company’s loss lessened since it announced a US$22m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$15m, as it approaches breakeven. The most pressing concern for investors is Brightcove's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Brightcove
Brightcove is bordering on breakeven, according to the 3 American IT analysts. They expect the company to post a final loss in 2020, before turning a profit of US$3.5m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 107%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Brightcove's upcoming projects, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 6.7% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Brightcove, so if you are interested in understanding the company at a deeper level, take a look at Brightcove's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:
Valuation: What is Brightcove 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 Brightcove 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 Brightcove’s board and the CEO’s background.
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.
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