Analysts Expect Breakeven For Expert.ai S.p.A. (BIT:EXAI) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Expert.ai S.p.A.'s (BIT:EXAI) future prospects. Expert.ai S.p.A., an artificial intelligence (AI) platform company, develops and sells cognitive computing software products based on AI algorithms to read and understand written language worldwide. With the latest financial year loss of €24m and a trailing-twelve-month loss of €17m, the €77m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Expert.ai's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Expert.ai

Expert.ai is bordering on breakeven, according to some Italian Software analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of €1.7m in 2025. Therefore, the company is expected to breakeven just over a year from today. 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 85% year-on-year, on average, 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 Expert.ai's upcoming projects, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Expert.ai is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Expert.ai which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Expert.ai, take a look at Expert.ai's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Valuation: What is Expert.ai 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 Expert.ai 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 Expert.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.