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When Will BioHiTech Global, Inc. (NASDAQ:BHTG) Breakeven?

Simply Wall St
·3 mins read

BioHiTech Global, Inc. (NASDAQ:BHTG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. BioHiTech Global, Inc., through its subsidiaries, provides technological, biological, and mechanical engineering solutions for the control, reduction, and/or reuse of organic and municipal waste worldwide. With the latest financial year loss of US$8.8m and a trailing-twelve-month loss of US$10m, the US$29m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is BioHiTech Global's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for BioHiTech Global

BioHiTech Global is bordering on breakeven, according to the 2 American Commercial Services analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$3.7m in 2022. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 98% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of BioHiTech Global's upcoming projects, however, take into account that by and large 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 issue worth mentioning. BioHiTech Global currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on BioHiTech Global, so if you are interested in understanding the company at a deeper level, take a look at BioHiTech Global's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

  1. Historical Track Record: What has BioHiTech Global's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on BioHiTech Global'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.

This article by Simply Wall St is general in nature. 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.