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Brightcove Inc.’s (NASDAQ:BCOV): Brightcove Inc. provides cloud-based services for video. The US$307m market-cap company announced a latest loss of -US$14.0m on 31 December 2018 for its most recent financial year result. Many investors are wondering the rate at which BCOV will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for BCOV’s growth and when analysts expect the company to become profitable.
According to the 4 industry analysts covering BCOV, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$2.4m in 2020. So, BCOV is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which BCOV must grow year-on-year. It turns out an average annual growth rate of 94% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of BCOV’s upcoming projects, 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.
One thing I’d like to point out is that BCOV has managed its capital judiciously, with debt making up 0.3% of equity. This means that BCOV has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on BCOV, so if you are interested in understanding the company at a deeper level, take a look at BCOV’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should look at:
- Valuation: What is BCOV 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 BCOV 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 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.
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If you spot an error that warrants correction, please contact the editor at email@example.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.