Expert.ai S.p.A. (BIT:EXAI) On The Verge Of Breaking Even
With the business potentially at an important milestone, we thought we'd take a closer look at Expert.ai S.p.A.'s (BIT:EXAI) future prospects. Expert.ai S.p.A., an artificial intelligence (AI) platform company, develops and sells cognitive computing software products based on AI algorithms to read and understand written language worldwide. The company’s loss has recently broadened since it announced a €10m loss in the full financial year, compared to the latest trailing-twelve-month loss of €10m, moving it further away from breakeven. Many investors are wondering about the rate at which Expert.ai will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Consensus from 2 of the Italian Software analysts is that Expert.ai is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of €600k in 2026. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 120% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Expert.ai's growth isn’t the focus of this broad overview, though, 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.
View our latest analysis for Expert.ai
Before we wrap up, there’s one issue worth mentioning. Expert.ai currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Expert.ai's case is 65%. 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 Expert.ai 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 Expert.ai, take a look at Expert.ai's company page on Simply Wall St. We've also compiled a list of important aspects you should further examine:
- Valuation: What is Expert.ai 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 Expert.ai 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 Expert.ai’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.
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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.