Contec.,Co.Ltd (KOSDAQ:451760) Is Expected To Breakeven In The Near Future

With the business potentially at an important milestone, we thought we'd take a closer look at Contec.,Co.Ltd's (KOSDAQ:451760) future prospects. Contec.,Co.Ltd provides space ground station, and satellite image processing and application services in South Korea and internationally. The ₩149b market-cap company posted a loss in its most recent financial year of ₩65b and a latest trailing-twelve-month loss of ₩18b shrinking the gap between loss and breakeven. As path to profitability is the topic on Contec.Co.Ltd's 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.

See our latest analysis for Contec.Co.Ltd

According to the 3 industry analysts covering Contec.Co.Ltd, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of ₩6.0b in 2025. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 111% year-on-year, on average, 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.

Underlying developments driving Contec.Co.Ltd's growth isn’t the focus of this broad overview, though, take into account that generally 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 judiciously, with debt making up 18% 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 Contec.Co.Ltd to cover in one brief article, but the key fundamentals for the company can all be found in one place – Contec.Co.Ltd's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Historical Track Record: What has Contec.Co.Ltd's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Contec.Co.Ltd'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.