Gaming Realms plc’s (LON:GMR): Gaming Realms plc develops, publishes, and licenses mobile gaming content in the United Kingdom, the United States, Canada, and internationally. The UK£22.54m market-cap company announced a latest loss of -UK£5.99m on 31 December 2017 for its most recent financial year result. Many investors are wondering the rate at which GMR will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for GMR’s growth and when analysts expect the company to become profitable.
According to the industry analysts covering GMR, breakeven is near. They anticipate the company to incur a final loss in -1, before generating positive profits of UK£0 in . Therefore, GMR is expected to breakeven roughly a few months from now. How fast will GMR have to grow each year in order to reach the breakeven point by ? Working backwards from analyst estimates, it turns out that they expect the company to grow 43.30% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, GMR may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of GMR’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.
One thing I’d like to point out is that GMR has managed its capital judiciously, with debt making up 23.13% of equity. This means that GMR has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on GMR, so if you are interested in understanding the company at a deeper level, take a look at GMR’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further examine:
- Valuation: What is GMR 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 GMR 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 Gaming Realms’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 pass 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.