Data I/O Corporation (NASDAQ:DAIO) On The Verge Of Breaking Even
With the business potentially at an important milestone, we thought we'd take a closer look at Data I/O Corporation's (NASDAQ:DAIO) future prospects. Data I/O Corporation engages in the design, manufacture, and sale of programming and security deployment systems and services for electronic device manufacturers in the United States, Europe, and internationally. On 31 December 2021, the US$42m market-cap company posted a loss of US$555k for its most recent financial year. Many investors are wondering about the rate at which Data I/O will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Data I/O
Expectations from some of the American Electronic analysts is that Data I/O is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$237k in 2022. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 129% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Data I/O's upcoming projects, but, 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.
One thing we’d like to point out is that Data I/O 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. This means that the company 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 Data I/O, so if you are interested in understanding the company at a deeper level, take a look at Data I/O's company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:
Valuation: What is Data I/O 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 Data I/O 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 Data I/O’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.
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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.
