Breakeven On The Horizon For Amaero International Ltd (ASX:3DA)

By
Simply Wall St
Published
May 17, 2022
ASX:3DA
Source: Shutterstock

Amaero International Ltd (ASX:3DA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Amaero International Ltd engages in the research, development, manufacture, and sale of laser-based metal additive products in Australia. The company’s loss has recently broadened since it announced a AU$7.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$7.7m, moving it further away from breakeven. As path to profitability is the topic on Amaero International's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Amaero International

According to some industry analysts covering Amaero International, breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of AU$3.3m in 2023. Therefore, the company is expected 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 120% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
ASX:3DA Earnings Per Share Growth May 17th 2022

Underlying developments driving Amaero International's growth isn’t the focus of this broad overview, however, 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.

Before we wrap up, there’s one aspect worth mentioning. Amaero International currently has no debt on its balance sheet, which is rare for a loss-making 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:

There are too many aspects of Amaero International to cover in one brief article, but the key fundamentals for the company can all be found in one place – Amaero International's company page on Simply Wall St. We've also compiled a list of important factors you should further research:

  1. Valuation: What is Amaero International 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 Amaero International 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 Amaero 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.

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