With the business potentially at an important milestone, we thought we'd take a closer look at nLIGHT, Inc.'s (NASDAQ:LASR) future prospects. nLIGHT, Inc. designs, develops, manufactures, and sells semiconductor and fiber lasers for industrial, microfabrication, and aerospace and defense applications. On 31 December 2021, the US$672m market-cap company posted a loss of US$30m for its most recent financial year. The most pressing concern for investors is nLIGHT's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
nLIGHT is bordering on breakeven, according to the 7 American Electronic analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$16m in 2023. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 85% year-on-year, on average, which is rather optimistic! 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 nLIGHT's upcoming projects, however, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that nLIGHT has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on nLIGHT, so if you are interested in understanding the company at a deeper level, take a look at nLIGHT's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:
- Valuation: What is nLIGHT 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 nLIGHT is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on nLIGHT’s board and the CEO’s background.
- 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.
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.