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With the business potentially at an important milestone, we thought we'd take a closer look at Revasum, Inc.'s (ASX:RVS) future prospects. Revasum, Inc. designs, develops, manufactures, and markets a portfolio of semiconductor processing equipment in Asia, North America, and Europe. With the latest financial year loss of US$15m and a trailing-twelve-month loss of US$21m, the AU$17m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Revasum 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.
According to some industry analysts covering Revasum, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$4.0m in 2022. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 98% 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.
Given this is a high-level overview, we won’t go into details of Revasum's upcoming projects, however, 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 we’d like to point out is that The company has managed its capital prudently, with debt making up 31% of equity. This means that it 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 Revasum, so if you are interested in understanding the company at a deeper level, take a look at Revasum's company page on Simply Wall St. We've also put together a list of important factors you should further research:
Valuation: What is Revasum 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 Revasum 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 Revasum’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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