Loss-Making Seeing Machines Limited (LON:SEE) Expected To Breakeven In The Medium-Term

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£168m market-cap company announced a latest loss of US$31m on 30 June 2024 for its most recent financial year result. Many investors are wondering about the rate at which Seeing Machines 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.

See our latest analysis for Seeing Machines

Seeing Machines is bordering on breakeven, according to the 2 British Electronic analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$9.6m in 2027. So, the company is predicted to breakeven approximately 2 years from today. 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 94%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Seeing Machines' upcoming projects, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Seeing Machines is its debt-to-equity ratio of 124%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in 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 compiled a list of essential aspects you should look at:

1. 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.
2. 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.
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.