Analysts Expect Lutronic Corporation (KOSDAQ:085370) To Breakeven Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Lutronic Corporation's (KOSDAQ:085370) future prospects. Lutronic Corporation manufactures and sells aesthetic laser and medical device, and related technology worldwide. The ₩250b market-cap company posted a loss in its most recent financial year of ₩11b and a latest trailing-twelve-month loss of ₩6.0b shrinking the gap between loss and breakeven. The most pressing concern for investors is Lutronic's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Lutronic

Expectations from some of the South Korean Medical Equipment analysts is that Lutronic is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of ₩2.8b in 2020. The company is therefore projected to breakeven around a year 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 134%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Lutronic's growth isn’t the focus of this broad overview, though, keep in mind that generally 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 issue worth mentioning. Lutronic currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Lutronic's case is 61%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Lutronic 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 Lutronic, take a look at Lutronic's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

1. Valuation: What is Lutronic 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 Lutronic 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 Lutronic’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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