Precise Biometrics AB (publ)'s (STO:PREC) Profit Outlook

We feel now is a pretty good time to analyse Precise Biometrics AB (publ)'s (STO:PREC) business as it appears the company may be on the cusp of a considerable accomplishment. Precise Biometrics AB (publ) offers identification software for the secure authentication of people’s identity in Sweden, Taiwan, Denmark, Finland, Norway, and internationally. The kr327m market-cap company posted a loss in its most recent financial year of kr26m and a latest trailing-twelve-month loss of kr21m shrinking the gap between loss and breakeven. As path to profitability is the topic on Precise Biometrics' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Precise Biometrics

Expectations from some of the Swedish Software analysts is that Precise Biometrics is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of kr5.9m in 2026. So, the company is predicted to breakeven approximately 2 years from now. 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 89% is expected, which signals high confidence from analysts. 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 Precise Biometrics' upcoming projects, though, take into account that typically 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 Precise Biometrics has no debt on its balance sheet, which is rare for a 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 too many aspects of Precise Biometrics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Precise Biometrics' company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:

1. Historical Track Record: What has Precise Biometrics' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Precise Biometrics' 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.