Predictive Oncology Inc.'s (NASDAQ:POAI) Path To Profitability

We feel now is a pretty good time to analyse Predictive Oncology Inc.'s (NASDAQ:POAI) business as it appears the company may be on the cusp of a considerable accomplishment. Predictive Oncology Inc., a knowledge and science-driven company, applies artificial intelligence (AI) to support the discovery and development of optimal cancer therapies. The US$5.4m market-cap company posted a loss in its most recent financial year of US$14m and a latest trailing-twelve-month loss of US$14m shrinking the gap between loss and breakeven. As path to profitability is the topic on Predictive Oncology's 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.

View our latest analysis for Predictive Oncology

According to some industry analysts covering Predictive Oncology, breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$1.5m in 2026. 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 75%, which is rather optimistic! 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 Predictive Oncology's upcoming projects, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 10.0% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Predictive Oncology'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 Predictive Oncology'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.