Market Sentiment Around Loss-Making Seeing Machines Limited (LON:SEE)
Seeing Machines Limited (LON:SEE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Seeing Machines Limited, together with its subsidiaries, provides driver and occupant monitoring system technologies in Australia, North America, the Asia Pacific, Europe, and internationally. The UK£252m market-cap company announced a latest loss of AU$25m on 30 June 2022 for its most recent financial year result. As path to profitability is the topic on Seeing Machines' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Seeing Machines
According to the 4 industry analysts covering Seeing Machines, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$9.3m in 2025. Therefore, the company is expected to breakeven roughly 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 70%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Seeing Machines' growth isn’t the focus of this broad overview, however, 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.
Before we wrap up, there’s one aspect worth mentioning. Seeing Machines currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of 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.
This article is not intended to be a comprehensive analysis on Seeing Machines, so if you are interested in understanding the company at a deeper level, take a look at Seeing Machines' company page on Simply Wall St. We've also compiled a list of important factors you should further examine:
Valuation: What is Seeing Machines 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 Seeing Machines is currently mispriced by the market.
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 background.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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