Yahoo Finance iMedia Brands, Inc.'s (NASDAQ:IMBI) Path To Profitability
With the business potentially at an important milestone, we thought we'd take a closer look at iMedia Brands, Inc.'s (NASDAQ:IMBI) future prospects. iMedia Brands, Inc. operates as a multiplatform interactive video and digital commerce company in the United States. With the latest financial year loss of US$13m and a trailing-twelve-month loss of US$20m, the US$155m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on iMedia Brands' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for iMedia Brands
Consensus from 4 of the American Online Retail analysts is that iMedia Brands is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$124k in 2024. So, the company is predicted to breakeven approximately 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 75% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of iMedia Brands' upcoming projects, however, take into account that typically 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. iMedia Brands currently has a debt-to-equity ratio of 157%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. 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 iMedia Brands 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 iMedia Brands, take a look at iMedia Brands' company page on Simply Wall St. We've also put together a list of important aspects you should further examine:
Valuation: What is iMedia Brands 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 iMedia Brands 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 iMedia Brands’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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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