Kalray S.A. (EPA:ALKAL): Is Breakeven Near?

Kalray S.A. (EPA:ALKAL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kalray S.A. provides processors and acceleration cards in France. The €225m market-cap company announced a latest loss of €16m on 31 December 2022 for its most recent financial year result. The most pressing concern for investors is Kalray’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.

Check out our latest analysis for Kalray

Consensus from 3 of the French Semiconductor analysts is that Kalray is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of €5.3m in 2024. The company is therefore projected to breakeven just over a year from now. 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 111%, which is rather optimistic! 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 Kalray’s upcoming projects, but, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 27% 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:

This article is not intended to be a comprehensive analysis on Kalray, so if you are interested in understanding the company at a deeper level, take a look at Kalray’s company page on Simply Wall St. We’ve also compiled a list of relevant aspects you should look at:

1. Valuation: What is Kalray 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 Kalray 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 Kalray’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.