Carbon Revolution Limited's (ASX:CBR): Carbon Revolution Limited designs, manufactures, and markets single piece carbon fiber wheels to original equipment manufacturers worldwide. With the latest financial year loss of -AU$27.2m and a trailing-twelve month of -AU$115.7m, the AU$280m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on CBR’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for CBR.
According to the 2 industry analysts covering CBR, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of AU$7.5m in 2022. So, CBR is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, I calculated the rate at which CBR must grow year-on-year. It turns out an average annual growth rate of 71% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, CBR may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of CBR’s upcoming projects, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that CBR has managed its capital judiciously, with debt making up 24% of equity. This means that CBR has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of CBR to cover in one brief article, but the key fundamentals for the company can all be found in one place – CBR’s company page on Simply Wall St. I’ve also put together a list of key aspects you should further research:
- Valuation: What is CBR 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 CBR 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 Carbon Revolution’s board and the CEO’s back ground.
- 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.
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