Yahoo Finance When Will Pivotal Systems Corporation (ASX:PVS) Become Profitable?
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Pivotal Systems Corporation's (ASX:PVS): Pivotal Systems Corporation provides gas flow monitoring and control technology platform for the semiconductor industry in Asia and North America. The AU$173m market-cap company announced a latest loss of -US$66.1m on 31 December 2018 for its most recent financial year result. Many investors are wondering the rate at which PVS will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for PVS’s growth and when analysts expect the company to become profitable.
Check out our latest analysis for Pivotal Systems
PVS is bordering on breakeven, according to the 2 Semiconductor analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$4.8m in 2020. Therefore, PVS is expected to breakeven roughly a few months from now. In order to meet this breakeven date, I calculated the rate at which PVS must grow year-on-year. It turns out an average annual growth rate of 80% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, PVS may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for PVS given that this is a high-level summary, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. PVS currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. This means that PVS 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 too many aspects of PVS to cover in one brief article, but the key fundamentals for the company can all be found in one place – PVS’s company page on Simply Wall St. I’ve also put together a list of important factors you should further examine:
Valuation: What is PVS 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 PVS 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 Pivotal Systems’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 editorial-team@simplywallst.com. 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.
