IM Co.,Ltd's (KOSDAQ:101390) Profit Outlook

IM Co.,Ltd (KOSDAQ:101390) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. IM Co.,Ltd engages in the manufacture and sale of mobile phone camera parts in South Korea. The company’s loss has recently broadened since it announced a ₩23b loss in the full financial year, compared to the latest trailing-twelve-month loss of ₩29b, moving it further away from breakeven. Many investors are wondering about the rate at which IMLtd 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.

Check out our latest analysis for IMLtd

IMLtd is bordering on breakeven, according to some South Korean Electronic analysts. They expect the company to post a final loss in 2024, before turning a profit of ₩10b in 2025. The company is therefore projected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 111%, 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 IMLtd's upcoming projects, though, keep in mind that typically 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. IMLtd currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in IMLtd's case is 78%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of IMLtd 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 IMLtd, take a look at IMLtd's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Valuation: What is IMLtd 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 IMLtd 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 IMLtd’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.