We feel now is a pretty good time to analyse Vuzix Corporation's (NASDAQ:VUZI) business as it appears the company may be on the cusp of a considerable accomplishment. Vuzix Corporation designs, manufactures, markets, and sells augmented reality (AR) wearable display and computing devices in North America, the Asia-Pacific, Europe, and internationally. The US$197m market-cap company’s loss lessened since it announced a US$28m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$27m, as it approaches breakeven. As path to profitability is the topic on Vuzix's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Vuzix is bordering on breakeven, according to the 3 American Consumer Durables analysts. They expect the company to post a final loss in 2022, before turning a profit of US$20m in 2023. So, the company is predicted to breakeven approximately 3 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 54% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Vuzix given that this is a high-level summary, 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 we’d like to point out is that The company has managed its capital judiciously, with debt making up 6.0% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of Vuzix which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Vuzix, take a look at Vuzix's company page on Simply Wall St. We've also compiled a list of important factors you should look at:
Valuation: What is Vuzix 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 Vuzix 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 Vuzix’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. 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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