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When Will Quotient Technology Inc. (NYSE:QUOT) Turn A Profit?

Simply Wall St

Quotient Technology Inc.'s (NYSE:QUOT): Quotient Technology Inc., a digital marketing company, provides technology and services that offers integrated digital promotions and media programs for consumer packaged goods (CPGs) brands and retailers. The company’s loss has recently broadened since it announced a -US$28.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$32.0m, moving it further away from breakeven. As path to profitability is the topic on QUOT’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for QUOT’s growth and when analysts expect the company to become profitable.

See our latest analysis for Quotient Technology

According to the 8 industry analysts covering QUOT, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$9.2m in 2022. QUOT is therefore projected to breakeven around 3 years from today. What rate will QUOT have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 67%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NYSE:QUOT Past and Future Earnings, December 16th 2019
NYSE:QUOT Past and Future Earnings, December 16th 2019

Underlying developments driving QUOT’s growth isn’t the focus of this broad overview, however, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before I wrap up, there’s one issue worth mentioning. QUOT currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in QUOT’s case is 57%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of QUOT 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 QUOT, take a look at QUOT’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should further research:

  1. Valuation: What is QUOT 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 QUOT 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 Quotient Technology’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.