We feel now is a pretty good time to analyse CooTek (Cayman) Inc.'s (NYSE:CTK) business as it appears the company may be on the cusp of a considerable accomplishment. CooTek (Cayman) Inc. operates as a mobile internet company in the United States, the People's Republic of China, the United States, and internationally. The US$18m market-cap company announced a latest loss of US$14m on 31 December 2021 for its most recent financial year result. The most pressing concern for investors is CooTek (Cayman)'s path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for CooTek (Cayman)
CooTek (Cayman) is bordering on breakeven, according to some American Software analysts. They expect the company to post a final loss in 2021, before turning a profit of US$3.3m in 2022. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 62%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for CooTek (Cayman) given that this is a high-level summary, however, take into account that generally 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. CooTek (Cayman) currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are too many aspects of CooTek (Cayman) to cover in one brief article, but the key fundamentals for the company can all be found in one place – CooTek (Cayman)'s company page on Simply Wall St. We've also put together a list of important factors you should look at:
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Historical Track Record: What has CooTek (Cayman)'s 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.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CooTek (Cayman)'s board and the CEO’s background.
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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.