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Loss-Making Cinedigm Corp. (NASDAQ:CIDM) Expected To Breakeven

Simply Wall St

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Cinedigm Corp.'s (NASDAQ:CIDM): Cinedigm Corp., together with its subsidiaries, operates as distributor and aggregator of independent movie, television, and other short form content primarily in the United States. The US$46m market-cap company’s loss lessens since it announced a -US$18.8m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$10.3m, as it approaches breakeven. Many investors are wondering the rate at which CIDM will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for CIDM’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for Cinedigm

CIDM is bordering on breakeven, according to the 3 Entertainment analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$14m in 2021. Therefore, CIDM is expected to breakeven roughly 2 years from now. How fast will CIDM 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 64% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGM:CIDM Past and Future Earnings, June 18th 2019

I’m not going to go through company-specific developments for CIDM given that this is a high-level summary, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before I wrap up, there’s one issue worth mentioning. CIDM currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of CIDM 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 CIDM, take a look at CIDM’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should look at:

  1. Valuation: What is CIDM 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 CIDM is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Cinedigm’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.