Superconductor Technologies Inc.'s (NASDAQ:SCON): Superconductor Technologies Inc., together with its subsidiaries, develops, produces, and commercializes high temperature superconductor materials and related technologies in the United States. The company’s loss has recently broadened since it announced a -US$8.1m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$8.3m, moving it further away from breakeven. Many investors are wondering the rate at which SCON will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for SCON, its year of breakeven and its implied growth rate.
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Expectation from Electronic analysts is SCON is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$648k in 2021. So, SCON is predicted to breakeven approximately 2 years from now. How fast will SCON have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 66% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, SCON may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of SCON’s upcoming projects, however, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. SCON has managed its capital prudently, with debt making up 13% of equity. This means that SCON has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on SCON, so if you are interested in understanding the company at a deeper level, take a look at SCON’s company page on Simply Wall St. I’ve also put together a list of essential factors you should further research:
- Historical Track Record: What has SCON'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 Superconductor 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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