Lantronix, Inc. (NASDAQ:LTRX) About To Shift From Loss To Profit
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$170m 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$4.7m shrinking the gap between loss and 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?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for Lantronix
Lantronix is bordering on breakeven, according to the 5 American Communications analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$2.8m in 2023. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 142% 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.
We're not going to go through company-specific developments for Lantronix given that this is a high-level summary, 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.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 28% 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.
Next Steps:
This article is not intended to be a comprehensive analysis on Lantronix, so if you are interested in understanding the company at a deeper level, take a look at Lantronix's company page on Simply Wall St. We've also compiled a list of essential factors 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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