Calix Limited's (ASX:CXL): Calix Limited engages in minerals processing and carbon capture business in Australia and internationally. With the latest financial year loss of -AU$7.5m and a trailing-twelve month of -AU$6.4m, the AU$99m market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on CXL’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for CXL, its year of breakeven and its implied growth rate.
According to the industry analysts covering CXL, breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of AU$272k in 2021. Therefore, CXL is expected to breakeven roughly a few months from now. In order to meet this breakeven date, I calculated the rate at which CXL must grow year-on-year. It turns out an average annual growth rate of 103% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving CXL’s growth isn’t the focus of this broad overview, however, bear in mind that by and large 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. CXL has managed its capital judiciously, with debt making up 9.5% of equity. This means that CXL has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of CXL 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 CXL, take a look at CXL’s company page on Simply Wall St. I’ve also put together a list of important aspects you should further examine:
- Historical Track Record: What has CXL'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 Calix’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.
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.
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