LightwaveRF plc (LON:LWRF): Are Analysts Optimistic?

LightwaveRF plc’s (LON:LWRF): LightwaveRF plc provides smart home products and software in the United Kingdom, Asia, the Middle East, and rest of Europe. With the latest financial year loss of -UK£2.5m and a trailing-twelve month of -UK£3.0m, the UK£3.4m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is LWRF’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for LWRF’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for LightwaveRF

Consensus from the 2 Electronic analysts is LWRF is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of UK£101k in 2020. So, LWRF is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which LWRF must grow year-on-year. It turns out an average annual growth rate of 107% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

AIM:LWRF Past and Future Earnings, November 26th 2019
AIM:LWRF Past and Future Earnings, November 26th 2019

I’m not going to go through company-specific developments for LWRF given that this is a high-level summary, but, 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.

Before I wrap up, there’s one aspect worth mentioning. LWRF has managed its capital prudently, with debt making up 17% of equity. This means that LWRF 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 LWRF, so if you are interested in understanding the company at a deeper level, take a look at LWRF’s company page on Simply Wall St. I’ve also compiled a list of essential factors you should further research:

  1. Historical Track Record: What has LWRF’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 LightwaveRF’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.

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.

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. Thank you for reading.