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Loss-Making Seeing Machines Limited (LON:SEE) Expected To Breakeven

Seeing Machines Limited's (LON:SEE): Seeing Machines Limited develops computer vision related technologies in Australia, North America, the Asia Pacific, Europe, and internationally. The UK£148m market-cap company announced a latest loss of -AU$41.8m on 30 June 2019 for its most recent financial year result. Many investors are wondering the rate at which SEE will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for SEE’s growth and when analysts expect the company to become profitable.

View our latest analysis for Seeing Machines

SEE is bordering on breakeven, according to the 3 Electronic analysts. They expect the company to post a final loss in 2021, before turning a profit of AU$100k in 2022. Therefore, SEE is expected to breakeven roughly 3 years from today. In order to meet this breakeven date, I calculated the rate at which SEE must grow year-on-year. It turns out an average annual growth rate of 71% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, SEE may become profitable much later than analysts predict.

AIM:SEE Past and Future Earnings, October 2nd 2019
AIM:SEE Past and Future Earnings, October 2nd 2019

Given this is a high-level overview, I won’t go into details of SEE’s upcoming projects, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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One thing I’d like to point out is that SEE has managed its capital prudently, with debt making up 0.9% of equity. This means that SEE has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of SEE to cover in one brief article, but the key fundamentals for the company can all be found in one place – SEE’s company page on Simply Wall St. I’ve also put together a list of key aspects you should look at:

  1. Valuation: What is SEE 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 SEE 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 Seeing Machines’s board and the CEO’s back ground.

  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.