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Lantronix, Inc. (NASDAQ:LTRX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Lantronix, Inc. provides software as a service (SaaS), engineering services, and hardware for edge computing, the Internet of Things (IoT), and remote environment management (REM) in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan. The company’s loss has recently broadened since it announced a US$4.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$9.0m, moving it further away from breakeven. Many investors are wondering about the rate at which Lantronix 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.
Consensus from 5 of the American Communications analysts is that Lantronix is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of US$4.4m in 2023. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 116% year-on-year, on average, which is rather optimistic! 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 Lantronix's upcoming projects, though, bear 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. The company has managed its capital prudently, with debt making up 22% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of Lantronix to cover in one brief article, but the key fundamentals for the company can all be found in one place – Lantronix's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Historical Track Record: What has Lantronix's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lantronix'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.