Synertec Corporation Limited (ASX:SOP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Synertec Corporation Limited provides engineering-based technology and services in Australia. The AU$28m market-cap company announced a latest loss of AU$3.4m on 30 June 2021 for its most recent financial year result. As path to profitability is the topic on Synertec's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Synertec

Expectations from some of the Australian Professional Services analysts is that Synertec is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of AU$300k in 2024. The company is therefore projected to breakeven around 3 years 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 72%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Synertec given that this is a high-level summary, though, keep 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 Synertec 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. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Synertec to cover in one brief article, but the key fundamentals for the company can all be found in one place – Synertec's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

1. Historical Track Record: What has Synertec'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.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Synertec'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.

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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.