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AudioEye, Inc. (NASDAQ:AEYE): Are Analysts Optimistic?

Simply Wall St

We feel now is a pretty good time to analyse AudioEye, Inc.'s (NASDAQ:AEYE) business as it appears the company may be on the cusp of a considerable accomplishment. AudioEye, Inc. provides Web accessibility solutions to Internet, print, broadcast, and other media to people regardless of their network connection, device, location, or disabilities in the United States. With the latest financial year loss of US$7.8m and a trailing-twelve-month loss of US$6.7m, the US$123m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which AudioEye will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for AudioEye

Consensus from 2 of the American Software analysts is that AudioEye is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$2.2m in 2022. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 92%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of AudioEye's upcoming projects, but, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with AudioEye is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

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

  1. Valuation: What is AudioEye 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 AudioEye 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 AudioEye’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@simplywallst.com.