Zwipe AS (OB:ZWIPE): Is Breakeven Near?

Published
May 20, 2022
OB:ZWIPE
Source: Shutterstock

Zwipe AS (OB:ZWIPE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Zwipe AS provides biometric payment cards components and wearables technology that enable consumers to authorize transactions with their fingerprints in Norway and internationally. On 31 December 2021, the kr499m market-cap company posted a loss of kr83m for its most recent financial year. 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.

See our latest analysis for Zwipe

According to some industry analysts covering Zwipe, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of kr73m in 2024. The company is therefore projected to breakeven around 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 87%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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OB:ZWIPE Earnings Per Share Growth May 20th 2022

We're not going to go through company-specific developments for Zwipe given that this is a high-level summary, but, keep in mind that typically 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. Zwipe currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, 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 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 important 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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