Veeco Instruments Inc.'s (NASDAQ:VECO): Veeco Instruments Inc., together with its subsidiaries, develops, manufactures, sells, and supports semiconductor and thin film process equipment primarily to make electronic devices worldwide. The US$642m market-cap posted a loss in its most recent financial year of -US$407.1m and a latest trailing-twelve-month loss of -US$190.5m shrinking the gap between loss and breakeven. As path to profitability is the topic on VECO’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for VECO’s growth and when analysts expect the company to become profitable.
According to the 4 industry analysts covering VECO, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$13m in 2021. So, VECO is predicted to breakeven approximately 2 years from now. How fast will VECO have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 87% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, VECO may become profitable much later than analysts predict.
Underlying developments driving VECO’s growth isn’t the focus of this broad overview, but, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. VECO currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in VECO’s case is 74%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are too many aspects of VECO to cover in one brief article, but the key fundamentals for the company can all be found in one place – VECO’s company page on Simply Wall St. I’ve also compiled a list of key factors you should further research:
- Historical Track Record: What has VECO'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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Veeco Instruments’s board and the CEO’s back ground.
- 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.