Pivotal Systems Corporation (ASX:PVS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Pivotal Systems Corporation engages in the design, development, manufacture, and sale of gas flow monitoring and control technology platform for the semiconductor industry in Asia and North America. On 31 December 2021, the AU$22m market-cap company posted a loss of US$7.2m for its most recent financial year. As path to profitability is the topic on Pivotal Systems' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 2 industry analysts covering Pivotal Systems, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$836k in 2022. So, the company is predicted to breakeven approximately a year 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 94% is expected, which signals high confidence from analysts. 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, we won’t go into details of Pivotal Systems' upcoming projects, however, take into account that typically 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 The company has managed its capital prudently, with debt making up 5.3% 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.
This article is not intended to be a comprehensive analysis on Pivotal Systems, so if you are interested in understanding the company at a deeper level, take a look at Pivotal Systems' company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:
Valuation: What is Pivotal Systems 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 Pivotal Systems 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 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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