Breakeven On The Horizon For LBT Innovations Limited (ASX:LBT)

LBT Innovations Limited’s (ASX:LBT): LBT Innovations Limited engages in the research, development, and commercialization of technologies for the healthcare and laboratory supply markets in Australia and Switzerland. The AU$37m market-cap company announced a latest loss of -AU$4.3m on 30 June 2019 for its most recent financial year result. The most pressing concern for investors is LBT’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for LBT.

Check out our latest analysis for LBT Innovations

According to the industry analysts covering LBT, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$3.1m in 2022. LBT is therefore projected to breakeven around 2 years from today. How fast will LBT have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 63% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, LBT may become profitable much later than analysts predict.

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Given this is a high-level overview, I won’t go into details of LBT’s upcoming projects, though, take into account 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 LBT has managed its capital judiciously, with debt making up 8.5% of equity. This means that LBT 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 LBT 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 LBT, take a look at LBT’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should look at:

1. Valuation: What is LBT 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 LBT is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on LBT Innovations’s board and the CEO’s back ground.
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.

If you spot an error that warrants correction, please contact the editor at [email protected]. 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.

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