In This Article:
Xtract One Technologies Inc. (TSE:XTRA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Xtract One Technologies Inc., together with its subsidiaries, engages in the research, development, and commercialization of threat detection gateway solutions in the United States, Japan, France, the United Kingdom, and Canada. The CA$149m market-cap company announced a latest loss of CA$11m on 31 July 2024 for its most recent financial year result. As path to profitability is the topic on Xtract One Technologies' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Xtract One Technologies
Consensus from 2 of the Canadian Aerospace & Defense analysts is that Xtract One Technologies is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of CA$241k in 2026. The company is therefore projected to breakeven around 2 years from today. 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 93%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Xtract One Technologies' upcoming projects, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that Xtract One Technologies 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. This means that the company 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 Xtract One Technologies to cover in one brief article, but the key fundamentals for the company can all be found in one place – Xtract One Technologies' company page on Simply Wall St. We've also put together a list of relevant factors you should further research:
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Historical Track Record: What has Xtract One Technologies' 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.
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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 Xtract One Technologies' board and the CEO’s background.
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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.
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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.