Superconductor Technologies Inc.'s (NASDAQ:SCON): Superconductor Technologies Inc., together with its subsidiaries, develops, produces, and commercializes high temperature superconductor materials and related technologies in the United States. The US$6.4m market-cap company announced a latest loss of -US$8.1m on 31 December 2018 for its most recent financial year result. The most pressing concern for investors is SCON’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for SCON, its year of breakeven and its implied growth rate.
Check out our latest analysis for Superconductor Technologies
Expectation from Electronic analysts is SCON is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$648k in 2021. So, SCON is predicted to breakeven approximately 2 years from today. What rate will SCON have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 64%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving SCON’s growth isn’t the focus of this broad overview, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that SCON has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. SCON currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are key fundamentals of SCON which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at SCON, take a look at SCON’s company page on Simply Wall St. I’ve also compiled a list of relevant factors you should look at:
- Historical Track Record: What has SCON'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 Superconductor Technologies’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.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Thank you for reading.