We feel now is a pretty good time to analyse Harvest Technology Group Limited's (ASX:HTG) business as it appears the company may be on the cusp of a considerable accomplishment. Harvest Technology Group Ltd provides offshore solutions and engineering services for subsea intervention projects and asset integrity risk mitigation primarily in Australia and the United States. The AU$45m market-cap company announced a latest loss of AU$14m on 30 June 2022 for its most recent financial year result. Many investors are wondering about the rate at which Harvest Technology Group 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.
Consensus from 2 of the Australian Electronic analysts is that Harvest Technology Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$1.3m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 119% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Harvest Technology Group given that this is a high-level summary, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 33% 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.
This article is not intended to be a comprehensive analysis on Harvest Technology Group, so if you are interested in understanding the company at a deeper level, take a look at Harvest Technology Group's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:
Valuation: What is Harvest Technology Group 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 Harvest Technology Group 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 Harvest Technology Group’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.
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