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Calix Limited (ASX:CXL): Are Analysts Optimistic?

Simply Wall St

Calix Limited's (ASX:CXL): Calix Limited, a technology company, engages in minerals processing and carbon capture business in Australia and internationally. With the latest financial year loss of -AU$3.3m and a trailing-twelve month of -AU$6.2m, the AU$111m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which CXL will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for CXL’s growth and when analysts expect the company to become profitable.

See our latest analysis for Calix

According to the industry analysts covering CXL, breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of AU$2.5m in 2020. Therefore, CXL is expected to breakeven roughly a few months from now. In order to meet this breakeven date, I calculated the rate at which CXL must grow year-on-year. It turns out an average annual growth rate of 99% is expected, which is rather optimistic! If this rate turns out to be too aggressive, CXL may become profitable much later than analysts predict.

ASX:CXL Past and Future Earnings, August 13th 2019

I’m not going to go through company-specific developments for CXL given that this is a high-level summary, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I’d like to point out is that CXL has managed its capital prudently, with debt making up 1.2% of equity. This means that CXL 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:

There are too many aspects of CXL to cover in one brief article, but the key fundamentals for the company can all be found in one place – CXL’s company page on Simply Wall St. I’ve also compiled a list of key factors you should further research:

  1. Valuation: What is CXL 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 CXL is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Calix’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.

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.