With the business potentially at an important milestone, we thought we'd take a closer look at RumbleON, Inc.'s (NASDAQ:RMBL) future prospects. RumbleON, Inc., a development stage company, provides an e-commerce platform that facilitates consumers and dealers to buy, sell, trade, and finance pre-owned recreation vehicles. With the latest financial year loss of US$45m and a trailing-twelve-month loss of US$35m, the US$77m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which RumbleON will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Consensus from 2 of the American Online Retail analysts is that RumbleON is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of US$5.6m in 2023. The company is therefore projected to breakeven around 3 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 68%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for RumbleON given that this is a high-level summary, though, keep in mind that generally 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. RumbleON currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on RumbleON, so if you are interested in understanding the company at a deeper level, take a look at RumbleON's company page on Simply Wall St. We've also put together a list of important factors you should further research:
Valuation: What is RumbleON 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 RumbleON is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on RumbleON’s 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.
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.
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