Breakeven On The Horizon For Lucibel SA (EPA:ALUCI)

Lucibel SA (EPA:ALUCI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Lucibel SA designs, manufactures, and markets lighting products and solutions based on LED technology in France and internationally. The €13m market-cap company’s loss lessened since it announced a €2.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of €2.4m, as it approaches breakeven. As path to profitability is the topic on Lucibel's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Lucibel

According to some industry analysts covering Lucibel, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of €20k in 2022. So, the company is predicted to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 86% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Lucibel's growth isn’t the focus of this broad overview, though, take into account 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 would like to bring into light with Lucibel is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Lucibel's case is 96%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Lucibel 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 Lucibel, take a look at Lucibel's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Valuation: What is Lucibel 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 Lucibel 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 Lucibel’s 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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