Electro Optic Systems Holdings Limited (ASX:EOS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Electro Optic Systems Holdings Limited engages in the development, manufacture, and sale of telescopes and dome enclosures, laser satellite tracking systems, electro-optic fire control systems, and microwave satellite dishes and receivers. On 31 December 2024, the AU$211m market-cap company posted a loss of AU$34m for its most recent financial year. Many investors are wondering about the rate at which Electro Optic Systems Holdings 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.

Check out our latest analysis for Electro Optic Systems Holdings

According to the 3 industry analysts covering Electro Optic Systems Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of AU$6.4m in 2026. Therefore, the company is expected 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 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 94% year-on-year, on average, which signals high confidence from analysts. 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 Electro Optic Systems Holdings given that this is a high-level summary, though, keep in mind that typically 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 judiciously, with debt making up 22% 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 Electro Optic Systems Holdings 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 Electro Optic Systems Holdings, take a look at Electro Optic Systems Holdings' company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Valuation: What is Electro Optic Systems Holdings 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 Electro Optic Systems Holdings 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 Electro Optic Systems Holdings’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.