Irisity AB (publ) (STO:IRIS): Are Analysts Optimistic?

Irisity AB (publ) (STO:IRIS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Irisity AB (publ) provides camera surveillance solutions. The kr716m market-cap company posted a loss in its most recent financial year of kr18m and a latest trailing-twelve-month loss of kr18m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Irisity 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 Irisity

According to some industry analysts covering Irisity, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of kr16m in 2021. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 126% is expected, 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.

We're not going to go through company-specific developments for Irisity given that this is a high-level summary, though, take into account that by and large 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 Irisity has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high 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 Irisity 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 Irisity, take a look at Irisity'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 Irisity 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 Irisity 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 Irisity’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. 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.
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