Breakeven Is Near for Kraken Robotics Inc. (CVE:PNG)
Kraken Robotics Inc. (CVE:PNG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kraken Robotics Inc., a marine technology company, engages in the design, manufacture, and sale of sonar and optical sensors, batteries, and underwater robotic equipment for unmanned underwater vehicles used in military and commercial applications. The CA$93m market-cap company posted a loss in its most recent financial year of CA$4.2m and a latest trailing-twelve-month loss of CA$3.0m shrinking the gap between loss and breakeven. As path to profitability is the topic on Kraken Robotics' 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.
Check out our latest analysis for Kraken Robotics
Kraken Robotics is bordering on breakeven, according to the 3 Canadian Electronic analysts. They expect the company to post a final loss in 2022, before turning a profit of CA$3.4m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 122%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Kraken Robotics' upcoming projects, though, keep 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 would like to bring into light with Kraken Robotics is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Kraken Robotics' case is 45%. 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 Kraken Robotics, so if you are interested in understanding the company at a deeper level, take a look at Kraken Robotics' company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:
Valuation: What is Kraken Robotics 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 Kraken Robotics 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 Kraken Robotics’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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