When Will Flux Power Holdings, Inc. (NASDAQ:FLUX) Become Profitable?
We feel now is a pretty good time to analyse Flux Power Holdings, Inc.'s (NASDAQ:FLUX) business as it appears the company may be on the cusp of a considerable accomplishment. Flux Power Holdings, Inc., through its subsidiary Flux Power, Inc., designs, develops, manufactures, and sells lithium-ion energy storage solutions for lift trucks, airport ground support equipment, and other industrial and commercial applications in the North America. The US$59m market-cap company posted a loss in its most recent financial year of US$6.7m and a latest trailing-twelve-month loss of US$6.7m shrinking the gap between loss and breakeven. As path to profitability is the topic on Flux Power Holdings' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Flux Power Holdings
Flux Power Holdings is bordering on breakeven, according to the 3 American Electrical analysts. They expect the company to post a final loss in 2024, before turning a profit of US$3.5m in 2025. Therefore, the company is expected to breakeven roughly 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 60%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Flux Power Holdings' growth isn’t the focus of this broad overview, but, 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.
Before we wrap up, there’s one issue worth mentioning. Flux Power Holdings currently has a debt-to-equity ratio of 155%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Flux Power Holdings, so if you are interested in understanding the company at a deeper level, take a look at Flux Power Holdings' company page on Simply Wall St. We've also put together a list of essential factors you should look at:
Valuation: What is Flux Power Holdings 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 Flux Power Holdings 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 Flux Power Holdings’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.
