Superconductor Technologies Inc.'s (NASDAQ:SCON): Superconductor Technologies Inc., together with its subsidiaries, develops, produces, and commercializes high temperature superconductor materials and related technologies in the United States. The US$3.9m market-cap posted a loss in its most recent financial year of -US$8.1m and a latest trailing-twelve-month loss of -US$9.4m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is SCON’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for SCON.
According to the industry analysts covering SCON, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$648k in 2021. SCON is therefore projected to breakeven around 2 years from today. What rate will SCON 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 71%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for SCON given that this is a high-level summary, however, take into account that typically 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 SCON 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. SCON currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on SCON, so if you are interested in understanding the company at a deeper level, take a look at SCON’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should further examine:
- Historical Track Record: What has SCON's 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 Superconductor Technologies’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.
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