ExaWizards Inc. (TSE:4259) Is About To Turn The Corner

We feel now is a pretty good time to analyse ExaWizards Inc.'s (TSE:4259) business as it appears the company may be on the cusp of a considerable accomplishment. ExaWizards Inc. develops AI-enabled services for industrial innovation and social problems solutions in Japan. The JP¥19b market-cap company announced a latest loss of JP¥610m on 31 March 2024 for its most recent financial year result. Many investors are wondering about the rate at which ExaWizards 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 ExaWizards

According to the 2 industry analysts covering ExaWizards, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of JP¥30m in 2025. Therefore, the company is expected to breakeven roughly 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 91%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving ExaWizards' growth isn’t the focus of this broad overview, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. ExaWizards currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in ExaWizards' case is 57%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

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.

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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.

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