When Can We Expect A Profit From Transense Technologies plc (LON:TRT)?

We feel now is a pretty good time to analyse Transense Technologies plc's (LON:TRT) business as it appears the company may be on the cusp of a considerable accomplishment. Transense Technologies plc develops, manufactures, and sells wireless and battery-less sensor systems using surface acoustic wave technology primarily in the United Kingdom. The UK£14m market-cap company posted a loss in its most recent financial year of UK£1.1m and a latest trailing-twelve-month loss of UK£472k shrinking the gap between loss and breakeven. As path to profitability is the topic on Transense Technologies' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Transense Technologies

According to the 2 industry analysts covering Transense Technologies, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of UK£409k in 2022. The company is therefore projected to breakeven just over a year 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 117% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Transense Technologies' upcoming projects, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. Transense Technologies currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company 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 Transense Technologies to cover in one brief article, but the key fundamentals for the company can all be found in one place – Transense Technologies' company page on Simply Wall St. We've also put together a list of key factors you should further examine:

1. Valuation: What is Transense Technologies 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 Transense Technologies 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 Transense Technologies’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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