Analysts Expect Pivotal Systems Corporation (ASX:PVS) To Breakeven Soon

We feel now is a pretty good time to analyse Pivotal Systems Corporation's (ASX:PVS) business as it appears the company may be on the cusp of a considerable accomplishment. Pivotal Systems Corporation engages in the design, development, manufacture, and sale of gas flow monitoring and control technology platform for the semiconductor industry in Asia and North America. The AU$72m market-cap company announced a latest loss of US$7.2m on 31 December 2021 for its most recent financial year result. Many investors are wondering about the rate at which Pivotal Systems will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Pivotal Systems

Expectations from some of the Australian Semiconductor analysts is that Pivotal Systems is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$836k in 2022. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 94% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Pivotal Systems' upcoming projects, however, 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. The company has managed its capital prudently, with debt making up 5.3% of equity. This means that it 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:

There are too many aspects of Pivotal Systems to cover in one brief article, but the key fundamentals for the company can all be found in one place – Pivotal Systems' company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is Pivotal Systems 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 Pivotal Systems 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 Pivotal Systems’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.