Kraken Robotics Inc (CVE:PNG): Is Breakeven Near?

Kraken Robotics Inc’s (CVE:PNG): Kraken Robotics Inc., a marine technology company, designs, develops, and markets underwater sonars and acoustic velocity sensors for unmanned underwater vehicles used in military and commercial applications in Canada, the United States, France, Israel, and internationally. With the latest financial year loss of -CA$2.4m and a trailing-twelve month of -CA$1.4m, the CA$51m market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on PNG’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for PNG.

Check out our latest analysis for Kraken Robotics

PNG is bordering on breakeven, according to the 2 Electronic analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of CA$5.4m in 2020. PNG is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, I calculated the rate at which PNG must grow year-on-year. It turns out an average annual growth rate of 101% is expected, which is rather optimistic! If this rate turns out to be too aggressive, PNG may become profitable much later than analysts predict.

TSXV:PNG Past Future Earnings November 27th 18
TSXV:PNG Past Future Earnings November 27th 18

I’m not going to go through company-specific developments for PNG given that this is a high-level summary, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before I wrap up, there’s one aspect worth mentioning. PNG currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. PNG 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:

This article is not intended to be a comprehensive analysis on PNG, so if you are interested in understanding the company at a deeper level, take a look at PNG’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should look at:

  1. Valuation: What is PNG 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 PNG 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 Kraken Robotics’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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.