Loss-Making iHeartMedia, Inc. (NASDAQ:IHRT) Set To Breakeven
With the business potentially at an important milestone, we thought we'd take a closer look at iHeartMedia, Inc.'s (NASDAQ:IHRT) future prospects. iHeartMedia, Inc. operates as a media and entertainment company worldwide. The company’s loss has recently broadened since it announced a US$265m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$1.0b, moving it further away from breakeven. Many investors are wondering about the rate at which iHeartMedia will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for iHeartMedia
According to the 8 industry analysts covering iHeartMedia, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$34m in 2024. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 97%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for iHeartMedia given that this is a high-level summary, but, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. iHeartMedia currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are key fundamentals of iHeartMedia which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at iHeartMedia, take a look at iHeartMedia's company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:
Valuation: What is iHeartMedia 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 iHeartMedia 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 iHeartMedia’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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
