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Breakeven On The Horizon For Exela Technologies, Inc. (NASDAQ:XELA)

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Simply Wall St
·3 min read
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With the business potentially at an important milestone, we thought we'd take a closer look at Exela Technologies, Inc.'s (NASDAQ:XELA) future prospects. Exela Technologies, Inc. provides transaction processing solutions, enterprise information management, document management, and digital business process services worldwide. The US$64m market-cap company posted a loss in its most recent financial year of US$512m and a latest trailing-twelve-month loss of US$393m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Exela Technologies will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Exela Technologies

According to some industry analysts covering Exela Technologies, breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$46m in 2023. So, the company is predicted to breakeven approximately 3 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 80% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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

Underlying developments driving Exela Technologies' growth isn’t the focus of this broad overview, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Exela Technologies 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:

There are too many aspects of Exela Technologies to cover in one brief article, but the key fundamentals for the company can all be found in one place – Exela Technologies' company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

  1. Valuation: What is Exela 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 Exela 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 Exela 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.

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.