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We feel now is a pretty good time to analyse FTC Solar, Inc.'s (NASDAQ:FTCI) business as it appears the company may be on the cusp of a considerable accomplishment. FTC Solar, Inc. provides solar tracker systems, technology, software, and engineering services in the United States, Vietnam, and internationally. With the latest financial year loss of US$16m and a trailing-twelve-month loss of US$92m, the US$436m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which FTC Solar will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 8 industry analysts covering FTC Solar, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$4.7m in 2022. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 79%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for FTC Solar given that this is a high-level summary, though, take into account that generally 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 FTC Solar 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. 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.
This article is not intended to be a comprehensive analysis on FTC Solar, so if you are interested in understanding the company at a deeper level, take a look at FTC Solar's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
Valuation: What is FTC Solar 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 FTC Solar 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 FTC Solar’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.