Analysts Expect Breakeven For BenevolentAI S.A. (AMS:BAI) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at BenevolentAI S.A.'s (AMS:BAI) future prospects. BenevolentAI S.A. operates as a clinical-stage artificial intelligence (AI) enabled drug discovery and development company. The €73m market-cap company announced a latest loss of UK£63m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on BenevolentAI's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for BenevolentAI

BenevolentAI is bordering on breakeven, according to the 3 Dutch Pharmaceuticals analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of UK£1.3m in 2026. Therefore, the company is expected to breakeven roughly 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 63%, which is extremely buoyant. 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 BenevolentAI's upcoming projects, however, take into account that by and large pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. BenevolentAI currently has no debt on its balance sheet, which is quite unusual for a cash-burning pharma, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Valuation: What is BenevolentAI 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 BenevolentAI 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 BenevolentAI’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.

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