When Will Silex Systems Limited (ASX:SLX) Become Profitable?
With the business potentially at an important milestone, we thought we'd take a closer look at Silex Systems Limited's (ASX:SLX) future prospects. Silex Systems Limited, a technology commercialization company, engages in the research and development, commercialization, and license of SILEX laser uranium enrichment technology in Australia. The AU$671m market-cap company announced a latest loss of AU$9.5m on 30 June 2022 for its most recent financial year result. The most pressing concern for investors is Silex Systems' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Silex Systems
Consensus from 2 of the Australian Semiconductor analysts is that Silex Systems is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$59k in 2024. Therefore, the company is expected to breakeven roughly 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 89% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Silex Systems given that this is a high-level summary, but, bear in mind 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 Silex Systems has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company 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 key fundamentals of Silex Systems which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Silex Systems, take a look at Silex Systems' company page on Simply Wall St. We've also compiled a list of essential factors you should look at:
Historical Track Record: What has Silex Systems' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Silex Systems' 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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