Analysts Are Optimistic We'll See A Profit From TT Electronics plc (LON:TTG)

TT Electronics plc (LON:TTG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. TT Electronics plc provides design-led advanced electronics technologies for performance critical applications in the healthcare, aerospace and defense, and automation and electrification markets in the United Kingdom, Rest of Europe, North America, Asia, and internationally. On 31 December 2024, the UK£192m market-cap company posted a loss of UK£53m for its most recent financial year. As path to profitability is the topic on TT Electronics' 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.

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Consensus from 5 of the British Electronic analysts is that TT Electronics is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK£16m in 2025. Therefore, the company is expected to breakeven roughly 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 86%, which signals high confidence from analysts. 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 TT Electronics given that this is a high-level summary, however, keep 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 TT Electronics

Before we wrap up, there’s one issue worth mentioning. TT Electronics currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in TT Electronics' case is 77%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is TT Electronics 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 TT Electronics 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 TT Electronics’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.