When Will AudioEye, Inc. (NASDAQ:AEYE) Become Profitable?
AudioEye, Inc. (NASDAQ:AEYE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. AudioEye, Inc. provides Internet content publication and distribution software and related services to Internet and other media to people regardless of their device, location, or disabilities in the United States and Europe. The US$144m market-cap company posted a loss in its most recent financial year of US$4.3m and a latest trailing-twelve-month loss of US$3.5m shrinking the gap between loss and breakeven. The most pressing concern for investors is AudioEye's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
AudioEye is bordering on breakeven, according to the 5 American Software analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$362k in 2026. Therefore, the company is expected to breakeven just over a year from now. 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 120%, 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 AudioEye's growth isn’t the focus of this broad overview, but, 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.
Check out our latest analysis for AudioEye
Before we wrap up, there’s one issue worth mentioning. AudioEye currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of AudioEye 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 AudioEye, take a look at AudioEye's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:
- Valuation: What is AudioEye 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 AudioEye is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on AudioEye’s board and the CEO’s background.
- 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.