Yahoo Finance Breakeven On The Horizon For Surface Transforms Plc (LON:SCE)
We feel now is a pretty good time to analyse Surface Transforms Plc's (LON:SCE) business as it appears the company may be on the cusp of a considerable accomplishment. Surface Transforms Plc, together with its subsidiaries, designs, develops, manufactures, and sells carbon ceramic products for the brakes market in the United Kingdom and rest of Europe; the United States; and internationally. On 31 December 2019, the UK£42m market-cap company posted a loss of UK£2.3m for its most recent financial year. As path to profitability is the topic on Surface Transforms' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Surface Transforms
According to the 3 industry analysts covering Surface Transforms, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of UK£659k in 2022. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 73% year-on-year, on average, which is rather optimistic! 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 Surface Transforms given that this is a high-level summary, however, take into account that generally 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 4.9% 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.
Next Steps:
This article is not intended to be a comprehensive analysis on Surface Transforms, so if you are interested in understanding the company at a deeper level, take a look at Surface Transforms' company page on Simply Wall St. We've also compiled a list of important factors you should further examine:
Historical Track Record: What has Surface Transforms' 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 Surface Transforms' 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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