We Might See A Profit From Windar Photonics PLC (LON:WPHO) Soon

Windar Photonics PLC (LON:WPHO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Windar Photonics PLC, through its subsidiaries, develops light detection and ranging wind sensors, and related software suite for use on electricity generating wind turbines in Europe, China, Australia, the United States, and rest of Asia. With the latest financial year loss of €183k and a trailing-twelve-month loss of €109k, the UK£32m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Windar Photonics will turn a profit, with the big question being “when will the company breakeven?” 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 Windar Photonics

Windar Photonics is bordering on breakeven, according to the 2 British Electronic analysts. They expect the company to post a final loss in 2023, before turning a profit of €400k in 2024. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 196%, which is extremely buoyant. 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 Windar Photonics' upcoming projects, but, take into account 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 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 Windar Photonics 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 Windar Photonics, take a look at Windar Photonics' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:

1. Valuation: What is Windar Photonics 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 Windar Photonics 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 Windar Photonics’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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.