Nocera, Inc. (NASDAQ:NCRA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Nocera, Inc., together with its subsidiaries, designs, develops, and produces land-based recirculation aquaculture systems for fish farming in Taiwan. The company’s loss has recently broadened since it announced a US$9.6m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$10m, moving it further away from breakeven. As path to profitability is the topic on Nocera's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Expectations from some of the American Machinery analysts is that Nocera is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$900k in 2022. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 105%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Nocera's growth isn’t the focus of this broad overview, however, keep in mind that typically 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 1.1% 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 Nocera, so if you are interested in understanding the company at a deeper level, take a look at Nocera's company page on Simply Wall St. We've also put together a list of key aspects you should further research:
- Valuation: What is Nocera 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 Nocera is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Nocera’s board and the CEO’s background.
- 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
