BIO-key International, Inc.'s (NASDAQ:BKYI) Shift From Loss To Profit

We feel now is a pretty good time to analyse BIO-key International, Inc.'s (NASDAQ:BKYI) business as it appears the company may be on the cusp of a considerable accomplishment. BIO-key International, Inc. develops and markets fingerprint biometric identification and identity verification technologies, and related identity management and credentialing biometric hardware and software solutions. With the latest financial year loss of US$15m and a trailing-twelve-month loss of US$18m, the US$32m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is BIO-key International's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for BIO-key International

BIO-key International is bordering on breakeven, according to some American Software analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.5m in 2022. So, the company is predicted 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 100% is expected, which is extremely buoyant. 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 BIO-key International's upcoming projects, but, bear in mind that by and large 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 1.1% 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:

This article is not intended to be a comprehensive analysis on BIO-key International, so if you are interested in understanding the company at a deeper level, take a look at BIO-key International's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:

1. Valuation: What is BIO-key International 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 BIO-key International 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 BIO-key International’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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