Spark Networks SE's (NYSEMKT:LOV) About To Shift From Loss To Profit
Spark Networks SE (NYSEMKT:LOV) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Spark Networks SE operates online dating sites and mobile applications. The US$126m market-cap company’s loss lessened since it announced a €15m loss in the full financial year, compared to the latest trailing-twelve-month loss of €11m, as it approaches breakeven. As path to profitability is the topic on Spark Networks' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Spark Networks
Spark Networks is bordering on breakeven, according to the 2 American Interactive Media and Services analysts. They expect the company to post a final loss in 2019, before turning a profit of €738k in 2020. Therefore, the company is expected to breakeven roughly 12 months 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 50% is expected, which is rather optimistic! 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 Spark Networks given that this is a high-level summary, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Spark Networks is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Spark Networks' case is 56%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Spark Networks 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 Spark Networks, take a look at Spark Networks' company page on Simply Wall St. We've also put together a list of important aspects you should look at:
Valuation: What is Spark Networks 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 Spark Networks 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 Spark Networks’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. 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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