Smart Eye AB (publ)'s (STO:SEYE): Smart Eye AB (publ) develops artificial intelligence powered eye-tracking technology that understands, assists, and predicts human intentions and actions in Sweden and internationally. The kr1.8b market-cap posted a loss in its most recent financial year of -kr56.4m and a latest trailing-twelve-month loss of -kr86.5m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is SEYE’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for SEYE, its year of breakeven and its implied growth rate.
SEYE is bordering on breakeven, according to Electronic analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of kr30m in 2021. Therefore, SEYE is expected to breakeven roughly 2 years from now. How fast will SEYE have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 72% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, SEYE may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for SEYE given that this is a high-level summary, 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.
One thing I’d like to point out is that SEYE has managed its capital prudently, with debt making up 1.5% of equity. This means that SEYE has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of SEYE which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at SEYE, take a look at SEYE’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should further research:
- Historical Track Record: What has SEYE'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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Smart Eye’s board and the CEO’s back ground.
- 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.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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