Market Sentiment Around Loss-Making NN, Inc. (NASDAQ:NNBR)
With the business potentially at an important milestone, we thought we'd take a closer look at NN, Inc.'s (NASDAQ:NNBR) future prospects. NN, Inc., a diversified industrial company, designs, manufactures, and sells high-precision components and assemblies. The US$75m market-cap company’s loss lessened since it announced a US$36m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$26m, as it approaches breakeven. Many investors are wondering about the rate at which NN will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for NN
NN is bordering on breakeven, according to the 3 American Machinery analysts. They expect the company to post a final loss in 2023, before turning a profit of US$3.1m in 2024. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 98% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving NN's growth isn’t the focus of this broad overview, though, bear in mind 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 we wrap up, there’s one issue worth mentioning. NN currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in NN's case is 57%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on NN, so if you are interested in understanding the company at a deeper level, take a look at NN's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:
Valuation: What is NN 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 NN 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 NN’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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