When Will VerifyMe, Inc. (NASDAQ:VRME) Turn A Profit?

We feel now is a pretty good time to analyse VerifyMe, Inc.'s (NASDAQ:VRME) business as it appears the company may be on the cusp of a considerable accomplishment. VerifyMe, Inc. provides security solutions for the identification and authentication of people, products, and packaging for various applications in the United States. The US$22m market-cap company posted a loss in its most recent financial year of US$2.5m and a latest trailing-twelve-month loss of US$5.4m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is VerifyMe's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for VerifyMe

Expectations from some of the American Electronic analysts is that VerifyMe is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$2.2m in 2022. 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 70% 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 VerifyMe's upcoming projects, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 0.8% 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 VerifyMe 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 VerifyMe, take a look at VerifyMe's company page on Simply Wall St. We've also put together a list of important aspects you should look at:

1. Valuation: What is VerifyMe 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 VerifyMe 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 VerifyMe’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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