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Leaf Mobile Inc. (TSE:LEAF) Is About To Turn The Corner

Leaf Mobile Inc. (TSE:LEAF) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Leaf Mobile Inc. engages in developing and producing counter culture mobile games. On 31 December 2020, the CA$359m market-cap company posted a loss of CA$4.3m for its most recent financial year. The most pressing concern for investors is Leaf Mobile's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Leaf Mobile

Consensus from 2 of the Canadian Entertainment analysts is that Leaf Mobile is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of CA$4.0m in 2021. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 132% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Leaf Mobile's growth isn’t the focus of this broad overview, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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One thing we’d like to point out is that The company has managed its capital prudently, with debt making up of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Leaf Mobile 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 Leaf Mobile, take a look at Leaf Mobile's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

  1. Valuation: What is Leaf Mobile 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 Leaf Mobile 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 Leaf Mobile’s board and the CEO’s background.

  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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.