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With the business potentially at an important milestone, we thought we'd take a closer look at ZoomInfo Technologies Inc.'s (NASDAQ:ZI) future prospects. ZoomInfo Technologies Inc. operates cloud-based go-to-market intelligence platform for sales and marketing teams worldwide. The US$19b market-cap company announced a latest loss of US$9.1m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on ZoomInfo Technologies' investors mind, we've decided to gauge market sentiment. 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 16 of the American Interactive Media and Services analysts is that ZoomInfo Technologies is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$84m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 65%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of ZoomInfo Technologies' upcoming projects, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with ZoomInfo Technologies is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in ZoomInfo Technologies' case is 80%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are key fundamentals of ZoomInfo Technologies which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at ZoomInfo Technologies, take a look at ZoomInfo Technologies' company page on Simply Wall St. We've also compiled a list of important factors you should further examine:
Valuation: What is ZoomInfo Technologies 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 ZoomInfo Technologies 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 ZoomInfo Technologies’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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