Pixelworks Inc’s (NASDAQ:PXLW) Shift From Loss To Profit
Pixelworks Inc’s (NASDAQ:PXLW): Pixelworks, Inc. designs, develops, and markets video processing semiconductors, intellectual property cores, software, and custom application specific integrated circuits (ICs) solutions for video applications. The US$140.20m market-cap posted a loss in its most recent financial year of -US$4.17m and a latest trailing-twelve-month loss of -US$7.59m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is PXLW’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for PXLW.
View out our latest analysis for Pixelworks
Expectation from Semiconductor analysts is PXLW is on the verge of breakeven. They anticipate the company to incur a final loss in -1, before generating positive profits of US$0 in . PXLW is therefore projected to breakeven around a couple of months from now! What rate will PXLW have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 45.44%, which signals high confidence from analysts. If this rate turns out to be too aggressive, PXLW may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for PXLW given that this is a high-level summary, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that PXLW has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. This means that PXLW has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of PXLW to cover in one brief article, but the key fundamentals for the company can all be found in one place – PXLW’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further examine:
Valuation: What is PXLW 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 PXLW 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 Pixelworks’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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
