Xplora Technologies AS' (OB:XPLRA) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Xplora Technologies AS' (OB:XPLRA) future prospects. Xplora Technologies AS, an information technology company, develops wearable smart devices and services for kids and families in Norway and internationally. With the latest financial year loss of kr21m and a trailing-twelve-month loss of kr22m, the kr1.1b market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Xplora Technologies 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.

See our latest analysis for Xplora Technologies

According to some industry analysts covering Xplora Technologies, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr29m in 2025. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 56% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Xplora Technologies' upcoming projects, however, take into account that by and large 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 24% 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 Xplora Technologies 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 Xplora Technologies, take a look at Xplora Technologies' company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

1. Valuation: What is Xplora Technologies 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 Xplora Technologies 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 Xplora Technologies’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.