PLAID,Inc. (TSE:4165): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at PLAID,Inc.'s (TSE:4165) future prospects. PLAID,Inc. develops and operates KARTE, a customer experience SaaS platform in Japan. The JP¥27b market-cap company’s loss lessened since it announced a JP¥2.1b loss in the full financial year, compared to the latest trailing-twelve-month loss of JP¥2.0b, as it approaches breakeven. Many investors are wondering about the rate at which PLAIDInc will turn a profit, with the big question being “when will the company breakeven?” 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 PLAIDInc

PLAIDInc is bordering on breakeven, according to some Japanese Software analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of JP¥96m in 2025. So, the company is predicted to breakeven just over a year 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 113%, which signals high confidence from analysts. 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 PLAIDInc's upcoming projects, but, 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.

One thing we would like to bring into light with PLAIDInc is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in PLAIDInc's case is 48%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of PLAIDInc 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 PLAIDInc, take a look at PLAIDInc'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 PLAIDInc'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 PLAIDInc'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.