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Revasum, Inc.'s (ASX:RVS) Shift From Loss To Profit

Simply Wall St

Revasum, Inc.'s (ASX:RVS): Revasum, Inc. designs, develops, manufactures, and markets a portfolio of semiconductor processing equipment worldwide. The company’s loss has recently broadened since it announced a -US$4.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$5.9m, moving it further away from breakeven. Many investors are wondering the rate at which RVS 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 RVS, its year of breakeven and its implied growth rate.

See our latest analysis for Revasum

RVS is bordering on breakeven, according to the 3 Semiconductor analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$1.7m in 2020. Therefore, RVS is expected to breakeven roughly a couple of months from now! What rate will RVS 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 68%, which signals high confidence from analysts. If this rate turns out to be too aggressive, RVS may become profitable much later than analysts predict.

ASX:RVS Past and Future Earnings, October 16th 2019

I’m not going to go through company-specific developments for RVS given that this is a high-level summary, but, take into account that typically 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. RVS currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. RVS currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of RVS which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at RVS, take a look at RVS’s company page on Simply Wall St. I’ve also compiled a list of relevant factors you should further examine:

  1. Valuation: What is RVS 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 RVS is currently mispriced by the market.
  2. 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 back ground.
  3. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.