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. The company’s loss has recently broadened since it announced a -US$29.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$36.6m, moving it further away from breakeven. Many investors are wondering the rate at which ICLK will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for ICLK’s growth and when analysts expect the company to become profitable.
Consensus from the 3 Media analysts is ICLK is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of US$17m in 2020. Therefore, ICLK is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, I calculated the rate at which ICLK must grow year-on-year. It turns out an average annual growth rate of 95% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, ICLK may become profitable much later than analysts predict.
Underlying developments driving ICLK’s growth isn’t the focus of this broad overview, though, take into account 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 would like to bring into light with ICLK is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in ICLK’s case is 45%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
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 key factors you should further research:
- 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.
- 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.
- 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 past 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. For errors that warrant correction please contact the editor at email@example.com.