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When Will iClick Interactive Asia Group Limited (NASDAQ:ICLK) Become Profitable?

Simply Wall St

iClick Interactive Asia Group Limited's (NASDAQ:ICLK): iClick Interactive Asia Group Limited, together with its subsidiaries, provides online marketing services in the People’s Republic of China, Hong Kong, and internationally. On 31 December 2018, the US$218m market-cap posted a loss of -US$32.4m for its most recent financial year. As path to profitability is the topic on ICLK’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for ICLK, its year of breakeven and its implied growth rate.

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View our latest analysis for iClick Interactive Asia Group

According to the 2 industry analysts covering ICLK, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$28m in 2020. ICLK is therefore projected to breakeven around a couple of months from now! What rate will ICLK have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 99%, which is rather optimistic! If this rate turns out to be too aggressive, ICLK may become profitable much later than analysts predict.

NasdaqGM:ICLK Past and Future Earnings, May 17th 2019

Underlying developments driving ICLK’s growth isn’t the focus of this broad overview, however, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one issue worth mentioning. ICLK currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in ICLK’s case is 42%. 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 ICLK, so if you are interested in understanding the company at a deeper level, take a look at ICLK’s company page on Simply Wall St. I’ve also compiled a list of important factors you should look at:

  1. Historical Track Record: What has ICLK's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on iClick Interactive Asia Group’s board and the CEO’s back ground.
  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.