When Will Envirosuite Limited (ASX:EVS) Breakeven?
We feel now is a pretty good time to analyse Envirosuite Limited's (ASX:EVS) business as it appears the company may be on the cusp of a considerable accomplishment. Envirosuite Limited develops and sells environmental management technology platform solutions. On 30 June 2020, the AU$174m market-cap company posted a loss of AU$18.2m for its most recent financial year. Many investors are wondering about the rate at which Envirosuite will turn a profit, with the big question being “when will the company 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 some industry analysts covering Envirosuite, breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of AU$7.0m in 2023. So, the company is predicted to breakeven approximately 3 years from today. 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 95% is expected, 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 Envirosuite given that this is a high-level summary, but, 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 we’d like to point out is that Envirosuite has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Envirosuite, so if you are interested in understanding the company at a deeper level, take a look at Envirosuite's company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:
Historical Track Record: What has Envirosuite'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.
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.
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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