i3 Verticals, Inc. (NASDAQ:IIIV) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. i3 Verticals, Inc. provides integrated payment and software solutions to small- and medium-sized businesses and organizations in education, non-profit, public sector, and healthcare markets in the United States. The US$749m market-cap company posted a loss in its most recent financial year of US$17m and a latest trailing-twelve-month loss of US$7.4m shrinking the gap between loss and breakeven. As path to profitability is the topic on i3 Verticals' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 6 of the American Diversified Financial analysts is that i3 Verticals is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$4.0m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 102% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving i3 Verticals' growth isn’t the focus of this broad overview, but, 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 we wrap up, there’s one issue worth mentioning. i3 Verticals currently has a debt-to-equity ratio of 124%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on i3 Verticals, so if you are interested in understanding the company at a deeper level, take a look at i3 Verticals' company page on Simply Wall St. We've also put together a list of key factors you should further examine:
Historical Track Record: What has i3 Verticals' 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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on i3 Verticals' 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.
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