POET Technologies Inc. (CVE:PTK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. POET Technologies Inc. designs, develops, manufactures, and sells discrete and integrated opto-electronic solutions in Canada, the United States, Singapore, and China. With the latest financial year loss of US$20m and a trailing-twelve-month loss of US$32m, the CA$551m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is POET Technologies' 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.

See our latest analysis for POET Technologies

According to the 3 industry analysts covering POET Technologies, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$15m in 2027. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 53% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of POET Technologies' upcoming projects, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. POET Technologies currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on POET Technologies, so if you are interested in understanding the company at a deeper level, take a look at POET Technologies' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

1. Historical Track Record: What has POET Technologies' 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 POET Technologies' 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.