Market Sentiment Around Loss-Making MoSys Inc (NASDAQ:MOSY)

MoSys Inc’s (NASDAQ:MOSY): MoSys, Inc., a semiconductor company, develops and sells integrated circuits (ICs) for the high-speed cloud networking, communications, security appliance, video, monitor and test, data center, and computing markets. The US$13.89m market-cap company’s loss lessens since it announced a -US$10.67m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$5.91m, as it approaches breakeven. As path to profitability is the topic on MOSY’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for MOSY, its year of breakeven and its implied growth rate.

View out our latest analysis for MoSys

According to the industry analysts covering MOSY, breakeven is near. They expect the company to post a final loss in 2017, before turning a profit of US$1.04m in 2018. MOSY is therefore projected to breakeven around a few months from now. How fast will MOSY have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 142.40% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, MOSY may become profitable much later than analysts predict.

NasdaqCM:MOSY Past Future Earnings July 2nd 18
NasdaqCM:MOSY Past Future Earnings July 2nd 18

Given this is a high-level overview, I won’t go into details of MOSY’s upcoming projects, however, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I would like to bring into light with MOSY is its debt-to-equity ratio of 120.94%. Typically, debt shouldn’t exceed 40% of your equity, which in MOSY’s case, it has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

  1. Historical Track Record: What has MOSY’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 MoSys’s board and the CEO’s back ground.
  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.