We feel now is a pretty good time to analyse Lantronix, Inc.'s (NASDAQ:LTRX) business as it appears the company may be on the cusp of a considerable accomplishment. Lantronix, Inc. provides solutions for video surveillance, traffic management, infotainment systems, robotics, edge computing, and remote environment management in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan. The US$173m market-cap company posted a loss in its most recent financial year of US$5.4m and a latest trailing-twelve-month loss of US$4.8m shrinking the gap between loss and breakeven. As path to profitability is the topic on Lantronix's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 5 industry analysts covering Lantronix, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$6.1m in 2024. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 195%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Lantronix given that this is a high-level summary, but, 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.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 25% 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 key fundamentals of Lantronix which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Lantronix, take a look at Lantronix's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:
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.
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