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Quotient Technology Inc. (NYSE:QUOT): Are Analysts Optimistic?

Simply Wall St

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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 US$1.0b market-cap posted a loss in its most recent financial year of -US$28.3m and a latest trailing-twelve-month loss of -US$30.2m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is QUOT’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for QUOT.

See our latest analysis for Quotient Technology

QUOT is bordering on breakeven, according to the 8 Online Retail analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$13m in 2021. Therefore, QUOT is expected to breakeven roughly 2 years from today. How fast will QUOT have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 66% 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.

NYSE:QUOT Past and Future Earnings, June 18th 2019

Underlying developments driving QUOT’s growth isn’t the focus of this broad overview, but, keep 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.

One thing I would like to bring into light with QUOT is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in QUOT’s case is 46%. 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 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 put together a list of pertinent aspects you should look at:

  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.

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.

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. Thank you for reading.