Sonim Technologies, Inc. (NASDAQ:SONM) Has Found A Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Sonim Technologies, Inc.'s (NASDAQ:SONM) future prospects. Sonim Technologies, Inc. provides ruggedized mobile phones and accessories for task workers. On 31 December 2023, the US$26m market-cap company posted a loss of US$90k for its most recent financial year. As path to profitability is the topic on Sonim Technologies' investors mind, we've decided to gauge market sentiment. 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 Sonim Technologies

Sonim Technologies is bordering on breakeven, according to some American Tech analysts. They expect the company to post a final loss in 2023, before turning a profit of US$637k in 2024. So, the company is predicted to breakeven approximately 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 140% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Sonim Technologies' upcoming projects, however, 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 aspect worth mentioning. Sonim Technologies currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Sonim Technologies, so if you are interested in understanding the company at a deeper level, take a look at Sonim Technologies' company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

1. Valuation: What is Sonim Technologies 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 Sonim Technologies 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 Sonim Technologies’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.

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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.