We feel now is a pretty good time to analyse Cambricon Technologies Corporation Limited's (SHSE:688256) business as it appears the company may be on the cusp of a considerable accomplishment. Cambricon Technologies Corporation Limited research, develops, design, and sells core chips in cloud server, edge computing, and terminal equipment in China. With the latest financial year loss of CN¥848m and a trailing-twelve-month loss of CN¥820m, the CN¥110b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Cambricon Technologies' 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.

According to the 6 industry analysts covering Cambricon Technologies, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of CN¥390m in 2026. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 97%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won't go into details of Cambricon Technologies' upcoming projects, but, 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. Cambricon Technologies currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Cambricon Technologies to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cambricon Technologies' company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Valuation: What is Cambricon Technologies 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 Cambricon Technologies 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 Cambricon Technologies'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.

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