Loss-Making Elliptic Laboratories ASA (OB:ELABS) Set To Breakeven

With the business potentially at an important milestone, we thought we'd take a closer look at Elliptic Laboratories ASA's (OB:ELABS) future prospects. Elliptic Laboratories ASA, an artificial intelligence (AI) software company, engages in the provision of AI virtual smart sensors for the smartphone, laptop, Internet of Things, and automotive industries in Norway, the United States, China, South Korea, Taiwan, and Japan. The kr1.1b market-cap company’s loss lessened since it announced a kr38m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr26m, as it approaches breakeven. As path to profitability is the topic on Elliptic Laboratories' 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.

View our latest analysis for Elliptic Laboratories

Expectations from some of the Norwegian Software analysts is that Elliptic Laboratories is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of kr20m in 2024. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 153% is expected, 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 Elliptic Laboratories' upcoming projects, however, bear in mind 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’d like to point out is that The company has managed its capital judiciously, with debt making up 1.6% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Elliptic Laboratories 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 Elliptic Laboratories, take a look at Elliptic Laboratories' company page on Simply Wall St. We've also put together a list of essential factors you should look at:

1. Historical Track Record: What has Elliptic Laboratories' 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 Elliptic Laboratories' 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.

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