When Will Envirosuite Limited (ASX:EVS) Become Profitable?
Envirosuite Limited (ASX:EVS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Envirosuite Limited develops and sells environmental management technology solutions. The AU$82m market-cap company announced a latest loss of AU$10m on 30 June 2023 for its most recent financial year result. The most pressing concern for investors is Envirosuite's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Envirosuite
According to the 4 industry analysts covering Envirosuite, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of AU$1.7m in 2026. So, the company is predicted to breakeven approximately 3 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 78% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Envirosuite's growth isn’t the focus of this broad overview, though, bear in mind that typically 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 1.3% 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 too many aspects of Envirosuite to cover in one brief article, but the key fundamentals for the company can all be found in one place – Envirosuite's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:
Valuation: What is Envirosuite 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 Envirosuite 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 Envirosuite’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.
