Nxt-ID, Inc.’s (NASDAQ:NXTD): Nxt-ID, Inc., a security technology company, engages in the development of products and solutions for security, healthcare, financial technology, and Internet of Things (IoT) markets. With the latest financial year loss of -US$9.0m and a trailing-twelve month of -US$2.7m, the US$18m market-cap alleviates its loss by moving closer towards its target of breakeven. Many investors are wondering the rate at which NXTD will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for NXTD’s growth and when analysts expect the company to become profitable.
Consensus from the 2 Software analysts is NXTD is on the verge of breakeven. They anticipate the company to incur a final loss in 2018, before generating positive profits of US$694k in 2019. NXTD is therefore projected to breakeven around a couple of months from now! How fast will NXTD have to grow each year in order to reach the breakeven point by 2019? Working backwards from analyst estimates, it turns out that they expect the company to grow 123% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of NXTD’s upcoming projects, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I would like to bring into light with NXTD is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in NXTD’s case is 76%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on NXTD, so if you are interested in understanding the company at a deeper level, take a look at NXTD’s company page on Simply Wall St. I’ve also put together a list of essential factors you should further examine:
- Historical Track Record: What has NXTD’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 Nxt-ID’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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.