In This Article:
We feel now is a pretty good time to analyse Seeing Machines Limited's (LON:SEE) business as it appears the company may be on the cusp of a considerable accomplishment. Seeing Machines Limited, together with its subsidiaries, provides driver and occupant monitoring system technologies in Australia, North America, the Asia Pacific, Europe, and internationally. On 30 June 2023, the UK£228m market-cap company posted a loss of US$16m for its most recent financial year. 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.
View our latest analysis for Seeing Machines
Seeing Machines is bordering on breakeven, according to the 3 British Electronic analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$16m in 2026. So, the company is predicted to breakeven approximately 3 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 90%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Seeing Machines' growth isn’t the focus of this broad overview, but, take into account that typically 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 issue worth mentioning. Seeing Machines currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Seeing Machines' case is 61%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Seeing Machines to cover in one brief article, but the key fundamentals for the company can all be found in one place – Seeing Machines' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
-
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.