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Calix Limited (ASX:CXL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Calix Limited provides industrial solutions to address global sustainability challenges in Australia and internationally. With the latest financial year loss of AU$7.1m and a trailing-twelve-month loss of AU$6.0m, the AU$333m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Calix's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 3 industry analysts covering Calix, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of AU$1.7m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 40% 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 Calix's growth isn’t the focus of this broad overview, but, bear in mind that by and large 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 The company has managed its capital judiciously, with debt making up 2.7% of equity. This means that it 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 too many aspects of Calix to cover in one brief article, but the key fundamentals for the company can all be found in one place – Calix's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:
Historical Track Record: What has Calix'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 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.
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. 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.
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