Cornerstone OnDemand Inc’s (NASDAQ:CSOD): Cornerstone OnDemand, Inc., together with its subsidiaries, provides learning and human capital management software through software-as-a-service model worldwide. With the latest financial year loss of -US$61.33M and a trailing-twelve month of -US$61.34M, the US$2.76B market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on CSOD’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for CSOD.
CSOD is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$11.00M in 2020. CSOD is therefore projected to breakeven around 2 years from today. How fast will CSOD have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 85.09% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, CSOD may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of CSOD’s upcoming projects, though, take into account that typically 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 CSOD is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and CSOD has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are key fundamentals of CSOD 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 CSOD, take a look at CSOD’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further examine:
- Valuation: What is CSOD 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 CSOD 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 Cornerstone OnDemand’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 pass 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.