When Will BluGlass Limited (ASX:BLG) Breakeven?
BluGlass Limited's (ASX:BLG): BluGlass Limited, together with its subsidiaries, engages in the research and development of group III Gallium nitrides in Australia. The AU$54m market-cap company announced a latest loss of -AU$14.4m on 30 June 2019 for its most recent financial year result. Many investors are wondering the rate at which BLG will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for BLG’s growth and when analysts expect the company to become profitable.
View our latest analysis for BluGlass
Expectation from Semiconductor analysts is BLG is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$429k in 2022. BLG is therefore projected to breakeven around 3 years from now. What rate will BLG have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 73%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving BLG’s growth isn’t the focus of this broad overview, but, bear in mind 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. BLG currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. This means that BLG 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 key fundamentals of BLG 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 BLG, take a look at BLG’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should further research:
Historical Track Record: What has BLG'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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on BluGlass’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.
