Advertisement
New Zealand markets closed
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NZD/USD

    0.5967
    -0.0039 (-0.64%)
     
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • OIL

    81.70
    +0.35 (+0.43%)
     
  • GOLD

    2,216.60
    +3.90 (+0.18%)
     

Market Sentiment Around Loss-Making SurgePays, Inc. (NASDAQ:SURG)

SurgePays, Inc. (NASDAQ:SURG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. SurgePays, Inc., a financial technology and telecommunications company, provides services to the underbanked community in the United States. With the latest financial year loss of US$14m and a trailing-twelve-month loss of US$11m, the US$83m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is SurgePays' 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 SurgePays

According to the 2 industry analysts covering SurgePays, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$19m 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 209%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

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

Underlying developments driving SurgePays' growth isn’t the focus of this broad overview, but, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

ADVERTISEMENT

Before we wrap up, there’s one issue worth mentioning. SurgePays currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on SurgePays, so if you are interested in understanding the company at a deeper level, take a look at SurgePays' company page on Simply Wall St. We've also put together a list of essential factors you should look at:

  1. Historical Track Record: What has SurgePays' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on SurgePays' 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.

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here