Valens Semiconductor Ltd. (NYSE:VLN) is expected to break even in the medium term

We think it’s a good time to analyze Valens Semiconductor Ltd. (NYSE: VLN) As it seems, the company may be on the verge of a huge achievement. Valens Semiconductor Ltd. engages in the supply of semiconductor products that enable high-speed video and data transmission for the audio-video and automotive industries. The company’s loss has widened recently since it reported a full-year loss of $38 million, compared to the last year-over-year loss of $43 million, l further away from equilibrium. The most pressing concern for investors is Valens Semiconductor’s path to profitability – when will it break even? We’ve put together a brief overview of industry analysts’ expectations for the company, its year of profitability and its implied growth rate.

See our latest analysis for Valens Semiconductor

The consensus of 5 American Semiconductor analysts is that Valens Semiconductor is close to breaking even. They expect the business to make a terminal loss in 2023, before making a profit of US$16 million in 2024. Therefore, the business is expected to break even in about 2 years from now. How fast will the business need to grow year over year to break even by that date? Using a line of best fit, we calculated an average annual growth rate of 74%, which is quite optimistic! If the business grows at a slower pace, it will become profitable later than expected.

NYSE: Earnings growth per share VLN August 18, 2022

Developments underlying Valens Semiconductor’s growth are not the focus of this general overview, but consider that in general a high rate of growth is not unusual, particularly when a company is in investment period.

One thing we would like to point out is that Valens Semiconductor has zero debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt to equity ratios. The company currently operates solely on shareholder funding and has no debt, reducing concerns about repayments and making it a less risky investment.

Next steps:

There are too many aspects of Valens Semiconductor to cover in a brief article, but the company fundamentals can all be found in one place – Valens Semiconductor’s corporate page on Simply Wall St. We We have also compiled a list of relevant factors you should consider in more detail:

  1. Evaluation: What is Valens Semiconductor worth today? Has future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Valens Semiconductor is currently undervalued by the market.
  2. Management team: An experienced management team at the helm bolsters our confidence in the company – take a look at who sits on Valens Semiconductor’s Board of Directors and the CEO’s background.
  3. Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Explore our free list of these great stocks here.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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