With the business potentially at an important milestone, we thought we'd take a closer look at Micro-X Limited's (ASX:MX1) future prospects. Micro-X Limited designs, develops, and manufactures ultra-lightweight carbon nano tube based X-ray products for the healthcare and improvised explosive device imaging security markets in Australia. The AU$154m market-cap company posted a loss in its most recent financial year of AU$10m and a latest trailing-twelve-month loss of AU$11m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Micro-X's 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.

View our latest analysis for Micro-X

Micro-X is bordering on breakeven, according to some Australian Medical Equipment analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$8.1m in 2023. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 112% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Micro-X's growth isn’t the focus of this broad overview, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Micro-X is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Micro-X's case is 74%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Micro-X 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 Micro-X, take a look at Micro-X's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Historical Track Record: What has Micro-X's 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 Micro-X'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.

This article by Simply Wall St is general in nature. 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.

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