Upland Software, Inc.'s (NASDAQ:UPLD): Upland Software, Inc. provides cloud-based enterprise work management software in the United States, the United Kingdom, Canada, and internationally. The US$860m market-cap company announced a latest loss of -US$10.8m on 31 December 2018 for its most recent financial year result. The most pressing concern for investors is UPLD’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for UPLD’s growth and when analysts expect the company to become profitable.
Consensus from the 7 Software analysts is UPLD is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$890k in 2020. UPLD is therefore projected to breakeven around a couple of months from now! What rate will UPLD 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 62%, which is extremely buoyant. If this rate turns out to be too aggressive, UPLD may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of UPLD’s upcoming projects, though, keep in mind that typically 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 UPLD is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in UPLD’s case, it 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 UPLD, so if you are interested in understanding the company at a deeper level, take a look at UPLD’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should further examine:
- Valuation: What is UPLD 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 UPLD 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 Upland Software’s board and the CEO’s back ground.
- 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 email@example.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.