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Analysts Expect Breakeven For Baylin Technologies Inc. (TSE:BYL)

Simply Wall St

Baylin Technologies Inc.'s (TSE:BYL): Baylin Technologies Inc., through its subsidiaries, engages in the research, designs, development, manufacture, and sale of a range of passive and active radio frequency (RF) and terrestrial microwave products in the North American and Asia. On 31 December 2019, the CA$43m market-cap posted a loss of -CA$19.6m for its most recent financial year. The most pressing concern for investors is BYL’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for BYL, its year of breakeven and its implied growth rate.

Check out our latest analysis for Baylin Technologies

BYL is bordering on breakeven, according to the 4 Electronic analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of CA$2.8m in 2021. BYL is therefore projected to breakeven around a couple of months from now! What rate will BYL 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 137%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

TSX:BYL Past and Future Earnings, March 14th 2020

Given this is a high-level overview, I won’t go into details of BYL’s upcoming projects, but, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I would like to bring into light with BYL is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in BYL’s case is 83%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on BYL, so if you are interested in understanding the company at a deeper level, take a look at BYL’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further examine:

  1. Historical Track Record: What has BYL'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.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Baylin Technologies’s board and the CEO’s back ground.
  3. 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 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.

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