Jianpu Technology Inc.'s (NYSE:JT): Jianpu Technology Inc. operates a platform that provides online discovery and recommendation services for financial products in the People’s Republic of China. With the latest financial year loss of -CN¥164.6m and a trailing-twelve month of -CN¥349.4m, the US$198m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on JT’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for JT, its year of breakeven and its implied growth rate.
According to the 4 industry analysts covering JT, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of CN¥219m in 2021. Therefore, JT is expected to breakeven roughly a few months from now. How fast will JT have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 118% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, JT may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for JT given that this is a high-level summary, however, bear 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.
Before I wrap up, there’s one aspect worth mentioning. JT has managed its capital prudently, with debt making up 12% of equity. This means that JT has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of JT 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 JT, take a look at JT’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further research:
- Historical Track Record: What has JT'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 Jianpu Technology’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.
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