When Will Titomic Limited (ASX:TTT) Turn A Profit?

We feel now is a pretty good time to analyse Titomic Limited's (ASX:TTT) business as it appears the company may be on the cusp of a considerable accomplishment. Titomic Limited engages in the additive manufacturing activities in Australia. The AU$87m market-cap company announced a latest loss of AU$11m on 30 June 2020 for its most recent financial year result. As path to profitability is the topic on Titomic's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Titomic

Titomic is bordering on breakeven, according to some Australian Chemicals analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$10m in 2023. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 77% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Titomic's growth isn’t the focus of this broad overview, but, bear in mind that by and large 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. Titomic 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 Titomic to cover in one brief article, but the key fundamentals for the company can all be found in one place – Titomic's company page on Simply Wall St. We've also put together a list of important factors you should further examine:

1. Valuation: What is Titomic 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 Titomic 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 Titomic’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. 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.
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