Loss-Making Pivotal Systems Corporation (ASX:PVS) Set To Breakeven
Pivotal Systems Corporation (ASX:PVS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. 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. On 31 December 2022, the AU$4.5m market-cap company posted a loss of US$15m for its most recent financial year. As path to profitability is the topic on Pivotal Systems' 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.
View 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 expect the company to post a final loss in 2022, before turning a profit of US$3.6m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 126% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Pivotal Systems' growth isn’t the focus of this broad overview, however, keep 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. The company has managed its capital prudently, with debt making up 11% 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.
There are key fundamentals of Pivotal Systems which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Pivotal Systems, take a look at Pivotal Systems' company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:
- Historical Track Record: What has Pivotal Systems' 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 Pivotal Systems' board and the CEO’s background.
- 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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Find out whether Pivotal Systems is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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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.
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.
High growth potential with adequate balance sheet.