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Vuzix Corporation's (NASDAQ:VUZI): Vuzix Corporation designs, manufactures, markets, and sells augmented reality (AR) wearable display devices in North America, the Asia-Pacific, Europe, and internationally. The US$87m market-cap posted a loss in its most recent financial year of -US$23.7m and a latest trailing-twelve-month loss of -US$24.7m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is VUZI’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for VUZI’s growth and when analysts expect the company to become profitable.
Consensus from the 4 Consumer Durables analysts is VUZI is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$13m in 2022. So, VUZI is predicted to breakeven approximately 3 years from now. In order to meet this breakeven date, I calculated the rate at which VUZI must grow year-on-year. It turns out an average annual growth rate of 66% is expected, which is rather optimistic! If this rate turns out to be too aggressive, VUZI may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for VUZI given that this is a high-level summary, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one aspect worth mentioning. VUZI currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. VUZI 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 VUZI, so if you are interested in understanding the company at a deeper level, take a look at VUZI’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should look at:
- Valuation: What is VUZI 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 VUZI 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 Vuzix’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 firstname.lastname@example.org. 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.