When Will Xeros Technology Group plc (LON:XSG) Turn A Profit?
We feel now is a pretty good time to analyse Xeros Technology Group plc's (LON:XSG) business as it appears the company may be on the cusp of a considerable accomplishment. Xeros Technology Group plc, together with its subsidiaries, develops and commercializes polymer-based technologies in Europe, North America, and internationally. The UK£4.6m market-cap company announced a latest loss of UK£6.9m on 31 December 2022 for its most recent financial year result. Many investors are wondering about the rate at which Xeros Technology Group will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Xeros Technology Group
Xeros Technology Group is bordering on breakeven, according to some British Machinery analysts. They expect the company to post a final loss in 2024, before turning a profit of UK£1.3m in 2025. The company is therefore projected to breakeven around 2 years from today. 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 68% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Xeros Technology Group's growth isn’t the focus of this broad overview, however, take into account that by and large 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 Xeros Technology Group has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of 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 Xeros Technology Group 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 Xeros Technology Group, take a look at Xeros Technology Group's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:
Valuation: What is Xeros Technology Group 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 Xeros Technology Group 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 Xeros Technology Group’s 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.
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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.
