Silex Systems Limited (ASX:SLX) Is Expected To Breakeven In The Near Future

Silex Systems Limited (ASX:SLX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Silex Systems Limited, a technology commercialization company, engages in the research and development, commercialization, and license of SILEX laser uranium enrichment technology in Australia. With the latest financial year loss of AU$9.5m and a trailing-twelve-month loss of AU$14m, the AU$873m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Silex 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 Silex Systems

Silex Systems is bordering on breakeven, according to some Australian Semiconductor analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$1.2m in 2024. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 114% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Silex Systems given that this is a high-level summary, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Silex Systems 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:

This article is not intended to be a comprehensive analysis on Silex Systems, so if you are interested in understanding the company at a deeper level, take a look at Silex Systems' company page on Simply Wall St. We've also put together a list of key factors you should further research:

1. Historical Track Record: What has Silex 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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Silex Systems' 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.