Fluence Corporation Limited's (ASX:FLC): Fluence Corporation Limited designs, manufactures, and sells water and wastewater treatment and reuse solutions for the municipal, commercial, and industrial markets worldwide. On 31 December 2019, the AU$131m market-cap posted a loss of US$31.4m for its most recent financial year. Many investors are wondering the rate at which FLC will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for FLC.
According to the 2 industry analysts covering FLC, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$2.0m in 2021. FLC is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which FLC must grow year-on-year. It turns out an average annual growth rate of 83% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, FLC may become profitable much later than analysts predict.
Underlying developments driving FLC’s growth isn’t the focus of this broad overview, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that FLC has managed its capital judiciously, with debt making up 6.2% of equity. This means that FLC 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 FLC to cover in one brief article, but the key fundamentals for the company can all be found in one place – FLC’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should look at:
- Valuation: What is FLC 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 FLC 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 Fluence’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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