Loss-Making XTM Inc. (CSE:PAID) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at XTM Inc.'s (CSE:PAID) future prospects. XTM Inc., a financial technology company, specializes in designing, building, and maintaining payment and ecommerce solutions customized for business and consumers in Canada. The CA$42m market-cap company announced a latest loss of CA$4.8m on 31 December 2021 for its most recent financial year result. Many investors are wondering about the rate at which XTM will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for XTM

According to some industry analysts covering XTM, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of CA$66k in 2023. So, the company is predicted to breakeven just over a year 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 105%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of XTM's upcoming projects, however, 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 3.7% of equity. This means that it 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 XTM to cover in one brief article, but the key fundamentals for the company can all be found in one place – XTM's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Historical Track Record: What has XTM'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 XTM'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.