Market Sentiment Around Loss-Making Linius Technologies Limited (ASX:LNU)

Linius Technologies Limited’s (ASX:LNU): Linius Technologies Limited engages in the development of technology products, software development, and commercialization and licensing of computer software. The AU$64.03m market-cap posted a loss in its most recent financial year of -AU$4.23m and a latest trailing-twelve-month loss of -AU$6.70m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on LNU’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for LNU, its year of breakeven and its implied growth rate.

See our latest analysis for Linius Technologies

According to the industry analysts covering LNU, breakeven is near. They expect the company to post a final loss in -1, before turning a profit of AU$0 in . So, LNU is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which LNU must grow year-on-year. It turns out an average annual growth rate of 96.65% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

ASX:LNU Past Future Earnings June 11th 18
ASX:LNU Past Future Earnings June 11th 18

I’m not going to go through company-specific developments for LNU given that this is a high-level summary, 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 I wrap up, there’s one aspect worth mentioning. LNU currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. LNU 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 LNU to cover in one brief article, but the key fundamentals for the company can all be found in one place – LNU’s company page on Simply Wall St. I’ve also put together a list of key aspects you should look at:

  1. Historical Track Record: What has LNU’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 Linius Technologies’s board and the CEO’s back ground.
  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.