Loss-Making iHeartMedia, Inc. (NASDAQ:IHRT) Set To Breakeven
With the business potentially at an important milestone, we thought we'd take a closer look at iHeartMedia, Inc.'s (NASDAQ:IHRT) future prospects. iHeartMedia, Inc. operates as an audio media company in the United States. The US$601m market-cap company posted a loss in its most recent financial year of US$1.0b and a latest trailing-twelve-month loss of US$399m shrinking the gap between loss and breakeven. As path to profitability is the topic on iHeartMedia's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 4 industry analysts covering iHeartMedia, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$72m in 2026. The company is therefore projected to breakeven around a year 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 113% 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.
Underlying developments driving iHeartMedia's growth isn’t the focus of this broad overview, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
View our latest analysis for iHeartMedia
One thing we would like to bring into light with iHeartMedia is it 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
This article is not intended to be a comprehensive analysis on iHeartMedia, so if you are interested in understanding the company at a deeper level, take a look at iHeartMedia's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:
- Valuation: What is iHeartMedia 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 iHeartMedia 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 iHeartMedia’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.
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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.