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We feel now is a pretty good time to analyse Identiv, Inc.'s (NASDAQ:INVE) business as it appears the company may be on the cusp of a considerable accomplishment. Identiv, Inc. operates as a security technology company that secures data, physical places, and things in the Americas, Europe, the Middle East, and the Asia-Pacific. With the latest financial year loss of US$6.2m and a trailing-twelve-month loss of US$5.6m, the US$319m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Identiv's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Identiv is bordering on breakeven, according to the 4 American Electronic analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$3.9m in 2022. Therefore, the company is expected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 153% is expected, which is rather optimistic! 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 Identiv's upcoming projects, though, 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 Identiv is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Identiv's case is 68%. 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 Identiv, so if you are interested in understanding the company at a deeper level, take a look at Identiv's company page on Simply Wall St. We've also put together a list of essential factors you should further examine:
Valuation: What is Identiv 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 Identiv 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 Identiv’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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