Contec.,Co.Ltd's (KOSDAQ:451760) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at Contec.,Co.Ltd's (KOSDAQ:451760) future prospects. Contec.,Co.Ltd provides space ground station, and satellite imagery services in South Korea and internationally. The ₩128b market-cap company posted a loss in its most recent financial year of ₩23b and a latest trailing-twelve-month loss of ₩26b leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Contec.Co.Ltd's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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Contec.Co.Ltd is bordering on breakeven, according to some South Korean Aerospace & Defense analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of ₩3.6b in 2026. So, the company is predicted to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 117% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Contec.Co.Ltd given that this is a high-level summary, 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.

Check out our latest analysis for Contec.Co.Ltd

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 14% 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.

Next Steps:

There are key fundamentals of Contec.Co.Ltd which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Contec.Co.Ltd, take a look at Contec.Co.Ltd's company page on Simply Wall St. We've also put together a list of important factors you should further examine:

1. Valuation: What is Contec.Co.Ltd 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 Contec.Co.Ltd 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 Contec.Co.Ltd’s board and the CEO’s background.
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.

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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.