Analysts Expect Breakeven For Neonode Inc. (NASDAQ:NEON) Before Long

Neonode Inc. (NASDAQ:NEON) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, Switzerland, Germany, France, Sweden, China, and internationally. With the latest financial year loss of US$4.9m and a trailing-twelve-month loss of US$5.4m, the US$29m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Neonode's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Neonode

Expectations from some of the American Electronic analysts is that Neonode is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$19m in 2025. Therefore, the company is expected to breakeven just over a year from today. 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 128% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

Underlying developments driving Neonode's growth isn’t the focus of this broad overview, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Neonode currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Historical Track Record: What has Neonode'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.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Neonode'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.

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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.