Breakeven On The Horizon For Intermolecular, Inc. (NASDAQ:IMI)
Intermolecular, Inc.’s (NASDAQ:IMI): Intermolecular, Inc. engages in the development of advanced materials using high productivity combinatorial (HPC) technology platform for the semiconductors, consumer electronics, automotive, and aerospace industries worldwide. The US$50m market-cap company announced a latest loss of -US$3.4m on 31 December 2018 for its most recent financial year result. As path to profitability is the topic on IMI’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for IMI, its year of breakeven and its implied growth rate.
View our latest analysis for Intermolecular
Expectation from Semiconductor analysts is IMI is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of US$138k in 2020. Therefore, IMI is expected to breakeven roughly a couple of months from now! How fast will IMI have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, IMI may become profitable much later than analysts predict.
Underlying developments driving IMI’s growth isn’t the focus of this broad overview, though, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. IMI currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. This means that IMI has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on IMI, so if you are interested in understanding the company at a deeper level, take a look at IMI’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further research:
Valuation: What is IMI 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 IMI 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 Intermolecular’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.
