When Will Veeco Instruments Inc. (NASDAQ:VECO) Breakeven?
Veeco Instruments Inc.’s (NASDAQ:VECO): Veeco Instruments Inc., together with its subsidiaries, develops, manufactures, sells, and supports semiconductor and thin film process equipment primarily to make electronic devices worldwide. On 31 December 2018, the US$575m market-cap posted a loss of -US$407.1m for its most recent financial year. Many investors are wondering the rate at which VECO will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for VECO’s growth and when analysts expect the company to become profitable.
View our latest analysis for Veeco Instruments
According to the 4 industry analysts covering VECO, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$12m in 2021. VECO is therefore projected to breakeven around 2 years from today. What rate will VECO 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 120%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of VECO’s upcoming projects, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I would like to bring into light with VECO is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in VECO’s case is 66%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of VECO 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 VECO, take a look at VECO’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further examine:
Historical Track Record: What has VECO’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 Veeco Instruments’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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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.
