We feel now is a pretty good time to analyse Rumble Inc.'s (NASDAQ:RUM) business as it appears the company may be on the cusp of a considerable accomplishment. Rumble Inc. operates video sharing platforms. With the latest financial year loss of US$13m and a trailing-twelve-month loss of US$22m, the US$3.4b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Rumble's 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.
Expectations from some of the American Interactive Media and Services analysts is that Rumble is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$1.9m in 2024. Therefore, the company is expected to breakeven roughly 2 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 67% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Rumble's growth isn’t the focus of this broad overview, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that Rumble has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on Rumble, so if you are interested in understanding the company at a deeper level, take a look at Rumble's company page on Simply Wall St. We've also put together a list of key factors you should look at:
- Valuation: What is Rumble 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 Rumble 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 Rumble’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.
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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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
