Loss-Making Veeco Instruments Inc. (NASDAQ:VECO) Set To Breakeven
We feel now is a pretty good time to analyse Veeco Instruments Inc.'s (NASDAQ:VECO) business as it appears the company may be on the cusp of a considerable accomplishment. Veeco Instruments Inc., together with its subsidiaries, develops, manufactures, sells, and supports semiconductor and thin film process equipment primarily to make electronic devices worldwide. With the latest financial year loss of US$79m and a trailing-twelve-month loss of US$41m, the US$916m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Veeco Instruments will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Veeco Instruments
According to the 5 industry analysts covering Veeco Instruments, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$23m in 2021. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 107% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Veeco Instruments' growth isn’t the focus of this broad overview, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Veeco Instruments currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Veeco Instruments' case is 81%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Veeco Instruments to cover in one brief article, but the key fundamentals for the company can all be found in one place – Veeco Instruments' company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:
Valuation: What is Veeco Instruments 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 Veeco Instruments 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 Veeco Instruments’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.
This article by Simply Wall St is general in nature. 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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