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Market Sentiment Around Loss-Making Identiv, Inc. (NASDAQ:INVE)

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·3 min read
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We feel now is a pretty good time to analyse Identiv, Inc.'s (NASDAQ:INVE) business as it appears the company may be on the cusp of a considerable accomplishment. Identiv, Inc. operates as a security technology company that secures data, physical places, and things worldwide. The US$144m market-cap company posted a loss in its most recent financial year of US$2.2m and a latest trailing-twelve-month loss of US$7.3m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Identiv will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Identiv

Identiv is bordering on breakeven, according to the 3 American Electronic analysts. They expect the company to post a final loss in 2021, before turning a profit of US$6.0m in 2022. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 119% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Identiv's upcoming projects, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Identiv is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Identiv's case is 70%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Identiv, so if you are interested in understanding the company at a deeper level, take a look at Identiv's company page on Simply Wall St. We've also put together a list of essential factors you should further research:

  1. Historical Track Record: What has Identiv'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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Identiv's board and the CEO’s background.

  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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.