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When Will Quotient Technology Inc. (NYSE:QUOT) Become Profitable?

Simply Wall St
·3 mins read

We feel now is a pretty good time to analyse Quotient Technology Inc.'s (NYSE:QUOT) business as it appears the company may be on the cusp of a considerable accomplishment. Quotient Technology Inc., a digital marketing company, provides technology and services that offers power 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$37.1m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$55.8m, moving it further away from breakeven. The most pressing concern for investors is Quotient Technology's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Quotient Technology

Quotient Technology is bordering on breakeven, according to the 8 American Online Retail analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$35m in 2023. Therefore, the company is expected to breakeven roughly 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% 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

We're not going to go through company-specific developments for Quotient Technology given that this is a high-level summary, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Quotient Technology currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Quotient Technology's case is 65%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Quotient Technology to cover in one brief article, but the key fundamentals for the company can all be found in one place – Quotient Technology's company page on Simply Wall St. We've also put together a list of key factors you should further research:

  1. Valuation: What is Quotient Technology 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 Quotient Technology 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 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@simplywallst.com.