IDEX Biometrics ASA's (OB:IDEX) Shift From Loss To Profit

Published
June 28, 2022
OB:IDEX
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IDEX Biometrics ASA (OB:IDEX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. IDEX Biometrics ASA engages in the design, development, and sale of fingerprint authentication solutions in Europe, the Middle East, Africa, the Americas, and the Asia-Pacific regions. The company’s loss has recently broadened since it announced a US$33m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$33m, moving it further away from breakeven. Many investors are wondering about the rate at which IDEX Biometrics will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for IDEX Biometrics

According to the 2 industry analysts covering IDEX Biometrics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$200k in 2024. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 78% year-on-year, on average, 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.

earnings-per-share-growth
OB:IDEX Earnings Per Share Growth June 28th 2022

Underlying developments driving IDEX Biometrics' growth isn’t the focus of this broad overview, 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.

Before we wrap up, there’s one aspect worth mentioning. IDEX Biometrics currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

  1. Historical Track Record: What has IDEX Biometrics' 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 IDEX Biometrics' 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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