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Breakeven On The Horizon For Eguana Technologies Inc. (CVE:EGT)

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Simply Wall St
·3 min read
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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 power electronics for residential and commercial fuel cell, photovoltaic, and battery applications in Asia, Australia, Canada, Europe, and the United States. With the latest financial year loss of CA$8.2m and a trailing-twelve-month loss of CA$8.8m, the CA$129m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Eguana Technologies will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Eguana Technologies

Expectations from some of the Canadian Electrical analysts is that Eguana Technologies is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of CA$4.5m in 2022. So, the company is predicted to breakeven just over a year 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 112% year-on-year, on average, which signals high confidence from analysts. 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

Underlying developments driving Eguana Technologies' growth isn’t the focus of this broad overview, 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. Eguana Technologies currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

  1. 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.

  2. 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.

  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 (at) simplywallst.com.