Loss-Making Tobii AB (publ) (STO:TOBII) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Tobii AB (publ)'s (STO:TOBII) future prospects. Tobii AB (publ) develops and sells eye-tracking technology and solutions in Sweden, Asia, Europe, North America, and internationally. The company’s loss has recently broadened since it announced a kr199m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr211m, moving it further away from breakeven. The most pressing concern for investors is Tobii's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Tobii

According to some industry analysts covering Tobii, breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of kr37m in 2026. The company is therefore projected to breakeven around 2 years 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 108% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Tobii's growth isn’t the focus of this broad overview, however, keep in mind that generally 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 issue worth mentioning. Tobii currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Tobii's case is 47%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Tobii 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 Tobii, take a look at Tobii's company page on Simply Wall St. We've also put together a list of essential factors you should look at:

1. Historical Track Record: What has Tobii's 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 Tobii'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.