Yahoo Finance When Can We Expect A Profit From Informatica Inc. (NYSE:INFA)?
With the business potentially at an important milestone, we thought we'd take a closer look at Informatica Inc.'s (NYSE:INFA) future prospects. Informatica Inc. develops an artificial intelligence-powered platform that connects, manages, and unifies data across multi-cloud, hybrid systems at enterprise scale in the United States. The US$5.6b market-cap company posted a loss in its most recent financial year of US$100m and a latest trailing-twelve-month loss of US$101m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Informatica will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for Informatica
Informatica is bordering on breakeven, according to the 11 American Software analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$128m in 2023. Therefore, the company is expected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 71%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Informatica given that this is a high-level summary, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Informatica is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Informatica's case is 92%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of Informatica to cover in one brief article, but the key fundamentals for the company can all be found in one place – Informatica's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:
Valuation: What is Informatica 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 Informatica 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 Informatica’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.
