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Market Sentiment Around Loss-Making Boingo Wireless Inc (NASDAQ:WIFI)

Boingo Wireless Inc’s (NASDAQ:WIFI): Boingo Wireless, Inc., together with its subsidiaries, provides wireless connectivity solutions for smartphones, tablets, laptops, wearables, and other wireless-enabled consumer devices. The US$1.1b market-cap company’s loss lessens since it announced a -US$19.4m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$2.7m, as it approaches breakeven. Many investors are wondering the rate at which WIFI will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for WIFI, its year of breakeven and its implied growth rate.

See our latest analysis for Boingo Wireless

Consensus from the 9 Wireless Telecom analysts is WIFI is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$1.6m in 2020. WIFI is therefore projected to breakeven around 2 years from today. How fast will WIFI have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 61% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGS:WIFI Past Future Earnings December 6th 18

I’m not going to go through company-specific developments for WIFI given that this is a high-level summary, though, keep in mind that typically 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 WIFI has managed its capital judiciously, with debt making up 26% of equity. This means that WIFI 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 too many aspects of WIFI to cover in one brief article, but the key fundamentals for the company can all be found in one place – WIFI’s company page on Simply Wall St. I’ve also compiled a list of important factors you should further research:

  1. Valuation: What is WIFI 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 WIFI 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 Boingo Wireless’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.

To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.