LiveXLive Media Inc’s (NASDAQ:LIVX): LiveXLive Media, Inc. engages in the acquisition, distribution, and monetization of live music, Internet radio, and music-related streaming and video content. With the latest financial year loss of -US$19.0m and a trailing-twelve month of -US$27.3m, the US$218m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is LIVX’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for LIVX, its year of breakeven and its implied growth rate.
According to the industry analysts covering LIVX, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$14m in 2021. So, LIVX is predicted to breakeven approximately a few months from now. What rate will LIVX 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 94%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of LIVX’s upcoming projects, though, 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 issue worth mentioning. LIVX currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in LIVX’s case is 44%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on LIVX, so if you are interested in understanding the company at a deeper level, take a look at LIVX’s company page on Simply Wall St. I’ve also put together a list of essential factors you should further examine:
- Valuation: What is LIVX 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 LIVX 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 LiveXLive Media’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.