ExaWizards Inc. (TSE:4259) About To Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at ExaWizards Inc.'s (TSE:4259) future prospects. ExaWizards Inc. develops AI-enabled services for industrial innovation and social problems solutions in Japan. The JP¥42b market-cap company’s loss lessened since it announced a JP¥610m loss in the full financial year, compared to the latest trailing-twelve-month loss of JP¥260m, as it approaches breakeven. As path to profitability is the topic on ExaWizards' 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 ExaWizards

ExaWizards is bordering on breakeven, according to the 3 Japanese IT analysts. They expect the company to post a final loss in 2024, before turning a profit of JP¥700m in 2025. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 75%, which is rather optimistic! 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 ExaWizards' upcoming projects, however, keep in mind that by and large 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 ExaWizards is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in ExaWizards' case is 58%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of ExaWizards to cover in one brief article, but the key fundamentals for the company can all be found in one place – ExaWizards' company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.