American International Group Inc’s (NYSE:AIG): American International Group, Inc. provides insurance products for commercial, institutional, and individual customers primarily in the United States, Europe, and Japan. The US$49.33B market-cap company announced a latest loss of -US$6.09B on 31 December 2017 for its most recent financial year result. Many investors are wondering the rate at which AIG will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for AIG’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for American International Group

According to the industry analysts covering AIG, breakeven is near. They expect the company to post a final loss in 2017, before turning a profit of US$5.31B in 2018. Therefore, AIG is expected to breakeven roughly a few months from now. In order to meet this breakeven date, I calculated the rate at which AIG must grow year-on-year. It turns out an average annual growth rate of 39.80% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, AIG may become profitable much later than analysts predict.

Given this is a high-level overview, I won’t go into detail the detail of AIG’s upcoming projects, but, 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 I would like to bring into light with AIG is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in AIG’s case is 48.15%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on AIG, so if you are interested in understanding the company at a deeper level, take a look at AIG’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should further examine:

1. Valuation: What is AIG 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 AIG 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 American International Group’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.

To help readers see pass 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.