Structural Monitoring Systems Plc (ASX:SMN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Structural Monitoring Systems Plc, together with its subsidiaries, designs, develops, manufactures, and sells structural health monitoring systems for the aviation industry in Australia, the United Kingdom, rest of Europe, Asia, the Middle East, Australasia, and Africa. With the latest financial year loss of AU$1.0m and a trailing-twelve-month loss of AU$2.3m, the AU$51m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Structural Monitoring Systems' 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.

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Structural Monitoring Systems is bordering on breakeven, according to some Australian Electronic analysts. They expect the company to post a final loss in 2024, before turning a profit of AU$3.7m in 2025. So, the company is predicted to breakeven approximately 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 125%, which is rather optimistic! 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 Structural Monitoring Systems' 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.

Check out our latest analysis for Structural Monitoring Systems

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 39% 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 too many aspects of Structural Monitoring Systems to cover in one brief article, but the key fundamentals for the company can all be found in one place – Structural Monitoring Systems' company page on Simply Wall St. We've also put together a list of important aspects you should look at:

1. Valuation: What is Structural Monitoring Systems 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 Structural Monitoring Systems 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 Structural Monitoring Systems’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.