Market Sentiment Around Loss-Making Eguana Technologies Inc. (CVE:EGT)
With the business potentially at an important milestone, we thought we'd take a closer look at Eguana Technologies Inc.'s (CVE:EGT) future prospects. Eguana Technologies Inc. designs and manufactures residential and commercial energy storage systems for fuel cell, photovoltaic, and battery applications in Canada, Asia, Australia, Europe, and the United States. The CA$108m market-cap company posted a loss in its most recent financial year of CA$10m and a latest trailing-twelve-month loss of CA$10m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Eguana 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.
Check out our latest analysis for Eguana Technologies
According to the 3 industry analysts covering Eguana Technologies, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of CA$5.7m in 2024. Therefore, the company is expected to breakeven roughly 2 years from now. 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 85% is expected, which is extremely buoyant. 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 Eguana Technologies' upcoming projects, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 0.9% 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 key fundamentals of Eguana Technologies 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 Eguana Technologies, take a look at Eguana Technologies' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:
Valuation: What is Eguana 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 Eguana Technologies is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Eguana Technologies’s board and the CEO’s background.
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.
