Neonode Inc. (NASDAQ:NEON) Is Expected To Breakeven In The Near Future

Neonode Inc. (NASDAQ:NEON) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, China, and internationally. With the latest financial year loss of US$6.5m and a trailing-twelve-month loss of US$5.2m, the US$107m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Neonode 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.

See our latest analysis for Neonode

Expectations from some of the American Electronic analysts is that Neonode is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$5.0m in 2024. Therefore, the company is expected to breakeven just over a year from now. 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 104% is expected, 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 Neonode'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.

Before we wrap up, there’s one aspect worth mentioning. Neonode currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Neonode 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 Neonode 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 Neonode’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.

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.

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