CAP-XX Limited's (LON:CPX) Shift From Loss To Profit
We feel now is a pretty good time to analyse CAP-XX Limited's (LON:CPX) business as it appears the company may be on the cusp of a considerable accomplishment. CAP-XX Limited, together with its subsidiaries, develops, manufactures, and sells supercapacitors and energy management systems primarily in the Asia Pacific, Europe, and North America. The UK£36m market-cap company posted a loss in its most recent financial year of AU$4.9m and a latest trailing-twelve-month loss of AU$5.1m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on CAP-XX's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for CAP-XX
According to the 2 industry analysts covering CAP-XX, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of AU$3.0m in 2023. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 102% is expected, which is extremely buoyant. 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 CAP-XX's upcoming projects, but, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. CAP-XX currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of CAP-XX to cover in one brief article, but the key fundamentals for the company can all be found in one place – CAP-XX's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:
Valuation: What is CAP-XX 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 CAP-XX 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 CAP-XX’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.
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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