Loss-Making Crown ElectroKinetics Corp. (NASDAQ:CRKN) Expected To Breakeven In The Medium-Term

We feel now is a pretty good time to analyse Crown ElectroKinetics Corp.'s (NASDAQ:CRKN) business as it appears the company may be on the cusp of a considerable accomplishment. Crown Electrokinetics Corp. focuses on commercializing electrokinetic technology for use in the smart glass market. The US$57m market-cap company posted a loss in its most recent financial year of US$9.6m and a latest trailing-twelve-month loss of US$22m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Crown ElectroKinetics' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Crown ElectroKinetics

Crown ElectroKinetics is bordering on breakeven, according to some American Chemicals analysts. They expect the company to post a final loss in 2022, before turning a profit of US$22m in 2023. The company is therefore projected to breakeven around 2 years from now. 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 92%, 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 Crown ElectroKinetics given that this is a high-level summary, however, take into account that by and large 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. Crown ElectroKinetics currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on Crown ElectroKinetics, so if you are interested in understanding the company at a deeper level, take a look at Crown ElectroKinetics' company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Historical Track Record: What has Crown ElectroKinetics' 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 Crown ElectroKinetics' 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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