Loss-Making Perfect Corp. (NYSE:PERF) Set To Breakeven
Perfect Corp. (NYSE:PERF) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Perfect Corp. provides SaaS artificial intelligence and augmented reality beauty and fashion tech business solutions. With the latest financial year loss of US$157m and a trailing-twelve-month loss of US$125m, the US$834m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Perfect's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Perfect
Consensus from 3 of the American Software analysts is that Perfect is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$34m in 2022. 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 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 83% 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 Perfect given that this is a high-level summary, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Perfect is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
This article is not intended to be a comprehensive analysis on Perfect, so if you are interested in understanding the company at a deeper level, take a look at Perfect's company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:
Valuation: What is Perfect 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 Perfect 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 Perfect’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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here