Micro-X Limited's (ASX:MX1) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Micro-X Limited's (ASX:MX1) future prospects. Micro-X Limited designs, develops, manufactures, and commercializes healthcare and security markets products using micro-X proprietary cold cathode X-ray technology in Australia, the United States, Asia-Pacific, Europe, the Middle East, and Africa. The AU$40m market-cap company announced a latest loss of AU$9.8m on 30 June 2024 for its most recent financial year result. Many investors are wondering about the rate at which Micro-X will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Micro-X

According to some industry analysts covering Micro-X, breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of AU$5.1m in 2027. So, the company is predicted to breakeven approximately 3 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 86%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Micro-X given that this is a high-level summary, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. Micro-X 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. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Micro-X to cover in one brief article, but the key fundamentals for the company can all be found in one place – Micro-X's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further examine:

1. Historical Track Record: What has Micro-X'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 Micro-X'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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.