When Will The OLB Group, Inc. (NASDAQ:OLB) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at The OLB Group, Inc.'s (NASDAQ:OLB) future prospects. The OLB Group, Inc. operates as a FinTech and payment facilitator company in the United States. With the latest financial year loss of US$1.3m and a trailing-twelve-month loss of US$1.8m, the US$44m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is OLB Group's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for OLB Group

Consensus from 2 of the American IT analysts is that OLB Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$580k in 2022. Therefore, the company is expected to breakeven just over a year from today. 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 98% 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.

earnings-per-share-growth

We're not going to go through company-specific developments for OLB Group given that this is a high-level summary, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. OLB Group currently has a debt-to-equity ratio of 147%. Generally, the rule of thumb is 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 OLB Group, so if you are interested in understanding the company at a deeper level, take a look at OLB Group's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

1. Valuation: What is OLB Group 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 OLB Group is currently mispriced by the market.

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

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.

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