Loss-Making Senzime AB (publ) (STO:SEZI) Expected To Breakeven

Senzime AB (publ)'s (STO:SEZI): Senzime AB (publ) develops patient-oriented monitoring systems that assess patients’ biochemical and physiological processes before, during, and after surgery in Sweden. With the latest financial year loss of -kr25.6m and a trailing-twelve month of -kr35.4m, the kr931m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on SEZI’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for SEZI’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for Senzime

According to the 2 industry analysts covering SEZI, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of kr21m in 2022. So, SEZI is predicted to breakeven approximately 2 years from now. How fast will SEZI have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 63% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

I’m not going to go through company-specific developments for SEZI given that this is a high-level summary, though, 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 I’d like to point out is that SEZI has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. This means that SEZI 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:

There are key fundamentals of SEZI which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at SEZI, take a look at SEZI’s company page on Simply Wall St. I’ve also put together a list of key factors you should further research:

1. Valuation: What is SEZI 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 SEZI 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 Senzime’s board and the CEO’s back ground.
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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.