Windar Photonics PLC (LON:WPHO) Has Found A Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Windar Photonics PLC's (LON:WPHO) future prospects. 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. The UK£49m market-cap company’s loss lessened since it announced a €183k loss in the full financial year, compared to the latest trailing-twelve-month loss of €109k, as it approaches breakeven. The most pressing concern for investors is Windar Photonics' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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Windar Photonics is bordering on breakeven, according to the 2 British Electronic analysts. They expect the company to post a final loss in 2024, before turning a profit of €4.9m in 2025. 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 47%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Windar Photonics given that this is a high-level summary, but, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

See our latest analysis for Windar Photonics

Before we wrap up, there’s one aspect worth mentioning. 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 too many aspects of Windar Photonics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Windar Photonics' company page on Simply Wall St. We've also put together a list of key factors you should look at:

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.