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i3 Verticals, Inc. (NASDAQ:IIIV) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. i3 Verticals, Inc. provides integrated payment and software solutions to small- and medium-sized businesses and organizations in education, non-profit, public sector, property management, and healthcare markets in the United States. The company’s loss has recently broadened since it announced a US$419k loss in the full financial year, compared to the latest trailing-twelve-month loss of US$3.1m, moving it further away from breakeven. As path to profitability is the topic on i3 Verticals' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
i3 Verticals is bordering on breakeven, according to the 7 American IT analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$10m in 2022. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? 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, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of i3 Verticals' upcoming projects, but, keep 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 we would like to bring into light with i3 Verticals is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in i3 Verticals' case is 63%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are too many aspects of i3 Verticals to cover in one brief article, but the key fundamentals for the company can all be found in one place – i3 Verticals' company page on Simply Wall St. We've also compiled a list of key factors you should further research:
Valuation: What is i3 Verticals 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 i3 Verticals 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 i3 Verticals’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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