With the business potentially at an important milestone, we thought we'd take a closer look at RumbleON, Inc.'s (NASDAQ:RMBL) future prospects. RumbleON, Inc. operates an e-commerce platform that aggregates and distributes pre-owned vehicles to and from consumers and dealers in North America. The US$505m market-cap company’s loss lessened since it announced a US$25m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$12m, as it approaches breakeven. As path to profitability is the topic on RumbleON'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.
Consensus from 5 of the American Online Retail analysts is that RumbleON is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$44m in 2022. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 110% year-on-year, on average, 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.
Underlying developments driving RumbleON's growth isn’t the focus of this broad overview, but, bear in mind that generally 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. RumbleON currently has a debt-to-equity ratio of 168%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are key fundamentals of RumbleON 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 RumbleON, take a look at RumbleON's company page on Simply Wall St. We've also put together a list of key aspects you should look at:
- Valuation: What is RumbleON 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 RumbleON 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 RumbleON’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
