With the business potentially at an important milestone, we thought we'd take a closer look at BIO-key International, Inc.'s (NASDAQ:BKYI) future prospects. BIO-key International, Inc., together with its subsidiaries, develops and markets fingerprint identification biometric technology, enterprise-ready identity access management solutions, and software solutions to commercial, government, and education customers in the United States and internationally. The US$24m market-cap company announced a latest loss of US$9.8m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is BIO-key International's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for BIO-key International

BIO-key International is bordering on breakeven, according to some American Software analysts. They expect the company to post a final loss in 2021, before turning a profit of US$200k 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 113% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of BIO-key International's upcoming projects, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that 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 essential factors you should further research:

1. Historical Track Record: What has BIO-key International's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

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.

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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