We feel now is a pretty good time to analyse Surface Transforms Plc's (LON:SCE) business as it appears the company may be on the cusp of a considerable accomplishment. Surface Transforms Plc, together with its subsidiaries, researches, designs, develops, manufactures, and sells carbon ceramic products for the brakes market in the United Kingdom, Germany, Sweden, rest of Europe, the United States, and internationally. The UK￡24m market-cap company posted a loss in its most recent financial year of UK￡4.8m and a latest trailing-twelve-month loss of UK￡7.4m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Surface Transforms will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Surface Transforms

Surface Transforms is bordering on breakeven, according to the 3 British Auto Components analysts. They expect the company to post a final loss in 2024, before turning a profit of UK￡6.5m in 2025. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 87% year-on-year, on average, 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 Surface Transforms' upcoming projects, but, bear 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.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 3.4% 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 Surface Transforms 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 Surface Transforms, take a look at Surface Transforms' company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Historical Track Record: What has Surface Transforms' 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.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Surface Transforms' 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.