LungLife AI, Inc. (LON:LLAI) Is Expected To Breakeven In The Near Future

With the business potentially at an important milestone, we thought we'd take a closer look at LungLife AI, Inc.'s (LON:LLAI) future prospects. LungLife AI, Inc., a diagnostic company, researches and develops clinical diagnostic solutions for lung cancer with artificial intelligence (AI) technology in the United States and the People’s Republic of China. The UK£3.6m market-cap company posted a loss in its most recent financial year of US$5.4m and a latest trailing-twelve-month loss of US$4.5m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which LungLife AI will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for LungLife AI

LungLife AI is bordering on breakeven, according to some British Biotechs analysts. They expect the company to post a final loss in 2024, before turning a profit of US$100k in 2025. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 101% year-on-year, on average, 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 LungLife AI's upcoming projects, however, bear in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that LungLife AI has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on LungLife AI, so if you are interested in understanding the company at a deeper level, take a look at LungLife AI's company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:

1. Historical Track Record: What has LungLife AI'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 LungLife AI'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.