Loss-Making Kraken Robotics Inc. (CVE:PNG) Set To Breakeven

By
Simply Wall St
Published
October 19, 2020

With the business potentially at an important milestone, we thought we'd take a closer look at Kraken Robotics Inc.'s (CVE:PNG) future prospects. Kraken Robotics Inc., a marine technology company, designs, manufactures, and sells software-centric sensors, batteries, and underwater robotic systems for unmanned underwater vehicles used in military and commercial applications. With the latest financial year loss of CA$3.4m and a trailing-twelve-month loss of CA$304k, the CA$101m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Kraken Robotics' path to profitability – when will it 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 Kraken Robotics

Kraken Robotics is bordering on breakeven, according to the 3 Canadian Electronic analysts. They expect the company to post a final loss in 2019, before turning a profit of CA$880k in 2020. 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 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 184% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

TSXV:PNG Earnings Per Share Growth October 19th 2020

We're not going to go through company-specific developments for Kraken Robotics given that this is a high-level summary, though, keep 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.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 4.2% 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 key fundamentals of Kraken Robotics 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 Kraken Robotics, take a look at Kraken Robotics' company page on Simply Wall St. We've also put together a list of key aspects you should further research:

  1. Historical Track Record: What has Kraken Robotics' 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 Kraken Robotics' 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. 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.
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