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When Will Amaero International Ltd (ASX:3DA) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at Amaero International Ltd's (ASX:3DA) future prospects. Amaero International Ltd engages in the research, development, manufacture, and sale of laser-based metal additive products in Australia. With the latest financial year loss of AU$7.0m and a trailing-twelve-month loss of AU$7.7m, the AU$51m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Amaero International will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Amaero International

Amaero International is bordering on breakeven, according to some Australian Machinery analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$3.3m in 2023. The company is therefore projected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 120%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Amaero International given that this is a high-level summary, though, 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 we’d like to point out is that Amaero International has no debt on its balance sheet, which is quite unusual for a cash-burning 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 Amaero International 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 Amaero International, take a look at Amaero International's company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

  1. Valuation: What is Amaero International 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 Amaero International is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Amaero International’s board and the CEO’s background.

  3. 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.