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.
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.
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.
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:
- 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.
- 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.
- 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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