Breakeven On The Horizon For Kalray S.A. (EPA:ALKAL)

With the business potentially at an important milestone, we thought we'd take a closer look at Kalray S.A.'s (EPA:ALKAL) future prospects. Kalray S.A. provides low-power and time-critical processor solutions in France. The company’s loss has recently broadened since it announced a €9.1m loss in the full financial year, compared to the latest trailing-twelve-month loss of €10m, moving it further away from breakeven. As path to profitability is the topic on Kalray's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Kalray

Kalray is bordering on breakeven, according to the 2 French Semiconductor analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of €13m in 2022. So, the company is predicted to breakeven approximately 2 years from today. 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 89% 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 Kalray's growth isn’t the focus of this broad overview, but, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 33% 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 Kalray 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 Kalray, take a look at Kalray's company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

1. Valuation: What is Kalray 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 Kalray 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 Kalray’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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