Kraken Robotics Inc. (CVE:PNG): Are Analysts Optimistic?

Kraken Robotics Inc.’s (CVE:PNG): Kraken Robotics Inc., a marine technology company, designs, manufactures, and sells software-centric sensors and underwater robotic systems for unmanned underwater vehicles used in military and commercial applications in Canada, the United States, France, Italy, Israel, the United Kingdom, Germany, and internationally. With the latest financial year loss of -CA$2.7m and a trailing-twelve month of -CA$4.4m, the CA$102m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which PNG will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for PNG, its year of breakeven and its implied growth rate.

View our latest analysis for Kraken Robotics

Consensus from the 2 Electronic analysts is PNG is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of CA$300k in 2020. So, PNG is predicted to breakeven approximately a couple of months from now! How fast will PNG have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 114% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, PNG may become profitable much later than analysts predict.

TSXV:PNG Past and Future Earnings, October 30th 2019
TSXV:PNG Past and Future Earnings, October 30th 2019

I’m not going to go through company-specific developments for PNG given that this is a high-level summary, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before I wrap up, there’s one aspect worth mentioning. PNG has managed its capital prudently, with debt making up 4.1% of equity. This means that PNG 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 PNG which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at PNG, take a look at PNG’s company page on Simply Wall St. I’ve also put together a list of key factors you should further research:

  1. Valuation: What is PNG 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 PNG 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 Kraken Robotics’s board and the CEO’s back ground.
  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.