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Vonage Holdings Corp (NYSE:VG): Are Analysts Optimistic?

Vonage Holdings Corp’s (NYSE:VG): Vonage Holdings Corp. provides communications services connecting people through cloud-connected devices worldwide. The US$2.46B market-cap company announced a latest loss of -US$33.93M on 31 December 2017 for its most recent financial year result. As path to profitability is the topic on VG’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for VG.

Check out our latest analysis for Vonage Holdings

VG is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2017, before generating positive profits of US$53.03M in 2018. VG is therefore projected to breakeven around a few months from now. What rate will VG 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 44.01%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

NYSE:VG Past Future Earnings Mar 20th 18
NYSE:VG Past Future Earnings Mar 20th 18

I’m not going to go through company-specific developments for VG given that this is a high-level summary, 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 VG is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in VG’s case is 49.47%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of VG 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 VG, take a look at VG’s company page on Simply Wall St. I’ve also put together a list of important factors you should further examine:

  1. Valuation: What is VG 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 VG 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 Vonage Holdings’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.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

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