Ilika plc (LON:IKA): Are Analysts Optimistic?

Ilika plc (LON:IKA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ilika plc designs, develops, and produces solid-state batteries under the Stereax name primarily in the United Kingdom, Asia, Europe, and North America. The UK£45m market-cap company announced a latest loss of UK£4.8m on 30 April 2024 for its most recent financial year result. The most pressing concern for investors is Ilika's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Ilika

According to some industry analysts covering Ilika, breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of UK£5.0m in 2027. The company is therefore projected to breakeven around 3 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 65% is expected, 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.

earnings-per-share-growth

We're not going to go through company-specific developments for Ilika given that this is a high-level summary, however, keep in mind 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. Ilika currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high 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 Ilika, so if you are interested in understanding the company at a deeper level, take a look at Ilika's company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Valuation: What is Ilika 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 Ilika 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 Ilika’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