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Market Sentiment Around Loss-Making Flexion Mobile Plc (STO:FLEXM)

Simply Wall St

Flexion Mobile Plc's (STO:FLEXM): Flexion Mobile Plc operates a distribution platform for third party free-to-play games on the Android market worldwide. With the latest financial year loss of -UK£1.8m and a trailing-twelve month of -UK£2.0m, the kr263m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which FLEXM will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for FLEXM’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for Flexion Mobile

According to the 2 industry analysts covering FLEXM, the consensus is breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of UK£1.6m in 2023. FLEXM is therefore projected to breakeven around 3 years from now. In order to meet this breakeven date, I calculated the rate at which FLEXM must grow year-on-year. It turns out an average annual growth rate of 66% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, FLEXM may become profitable much later than analysts predict.

OM:FLEXM Past and Future Earnings, March 14th 2020

I’m not going to go through company-specific developments for FLEXM given that this is a high-level summary, however, 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 aspect worth mentioning. FLEXM has managed its capital prudently, with debt making up of equity. This means that FLEXM has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of FLEXM 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 FLEXM, take a look at FLEXM’s company page on Simply Wall St. I’ve also put together a list of important factors you should further research:

  1. Historical Track Record: What has FLEXM'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 Flexion Mobile’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.

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.

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. Thank you for reading.