Loss-Making Zwipe AS (OB:ZWIPE) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Zwipe AS' (OB:ZWIPE) future prospects. Zwipe AS provides biometric card-based access control security solutions to enterprises and facilities in Norway and internationally. With the latest financial year loss of kr100m and a trailing-twelve-month loss of kr74m, the kr26m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Zwipe will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Zwipe

Expectations from some of the Norwegian Electronic analysts is that Zwipe is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of kr65m in 2026. So, the company is predicted to breakeven approximately 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 105%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Zwipe's growth isn’t the focus of this broad overview, however, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 34% 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 Zwipe 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 Zwipe, take a look at Zwipe's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

1. Valuation: What is Zwipe 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 Zwipe 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 Zwipe’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.