Accsys Technologies PLC's (LON:AXS): Accsys Technologies PLC, together with its subsidiaries, produces and sells Accoya solid wood and Tricoya wood elements in the United Kingdom, Ireland, Benelux, rest of Europe, the Americas, the Asia-Pacific, and internationally. On 31 March 2019, the UK£118m market-cap posted a loss of -€5.9m for its most recent financial year. Many investors are wondering the rate at which AXS will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for AXS.
According to the 3 industry analysts covering AXS, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of €2.1m in 2022. Therefore, AXS is expected to breakeven roughly 3 years from now. How fast will AXS have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 62% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving AXS’s growth isn’t the focus of this broad overview, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. AXS currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in AXS’s case is 77%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on AXS, so if you are interested in understanding the company at a deeper level, take a look at AXS’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should further research:
- Historical Track Record: What has AXS'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 Accsys Technologies’s board and the CEO’s back ground.
- 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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