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Kerlink SA’s (EPA:ALKLK): Kerlink SA provides end-to-end network solutions for the Internet of things (IoT) market worldwide. The €27m market-cap posted a loss in its most recent financial year of -€308k and a latest trailing-twelve-month loss of -€1m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on ALKLK’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for ALKLK’s growth and when analysts expect the company to become profitable.
Check out our latest analysis for Kerlink
Expectation from Communications analysts is ALKLK is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of €7m in 2020. So, ALKLK is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which ALKLK must grow year-on-year. It turns out an average annual growth rate of 111% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of ALKLK’s upcoming projects, but, 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 I’d like to point out is that ALKLK has managed its capital prudently, with debt making up 15% of equity. This means that ALKLK has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of ALKLK 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 ALKLK, take a look at ALKLK’s company page on Simply Wall St. I’ve also put together a list of important factors you should look at:
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Valuation: What is ALKLK 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 ALKLK is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kerlink’s board and the CEO’s back ground.
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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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.