U.S. markets close in 3 hours 36 minutes
  • S&P 500

    4,143.01
    -2.18 (-0.05%)
     
  • Dow 30

    32,833.80
    +30.33 (+0.09%)
     
  • Nasdaq

    12,660.01
    +2.46 (+0.02%)
     
  • Russell 2000

    1,943.35
    +21.53 (+1.12%)
     
  • Crude Oil

    90.52
    +1.51 (+1.70%)
     
  • Gold

    1,803.50
    +12.30 (+0.69%)
     
  • Silver

    20.64
    +0.80 (+4.02%)
     
  • EUR/USD

    1.0208
    +0.0021 (+0.20%)
     
  • 10-Yr Bond

    2.7760
    -0.0640 (-2.25%)
     
  • GBP/USD

    1.2085
    +0.0015 (+0.12%)
     
  • USD/JPY

    134.7120
    -0.2580 (-0.19%)
     
  • BTC-USD

    23,887.81
    +797.42 (+3.45%)
     
  • CMC Crypto 200

    556.76
    +13.88 (+2.56%)
     
  • FTSE 100

    7,482.37
    +42.63 (+0.57%)
     
  • Nikkei 225

    28,249.24
    +73.37 (+0.26%)
     

Li-Cycle Holdings Corp.'s (NYSE:LICY) Shift From Loss To Profit

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

We feel now is a pretty good time to analyse Li-Cycle Holdings Corp.'s (NYSE:LICY) business as it appears the company may be on the cusp of a considerable accomplishment. Li-Cycle Holdings Corp. engages in the lithium-ion battery resource recovery and lithium-ion battery recycling business in North America. The US$1.3b market-cap company posted a loss in its most recent financial year of US$227m and a latest trailing-twelve-month loss of US$204m shrinking the gap between loss and breakeven. The most pressing concern for investors is Li-Cycle Holdings' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Li-Cycle Holdings

According to the 7 industry analysts covering Li-Cycle Holdings, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$45m in 2024. The company is therefore projected to breakeven around 2 years from now. 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 68% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Li-Cycle 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.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 18% 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 Li-Cycle Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Li-Cycle Holdings' company page on Simply Wall St. We've also put together a list of important aspects you should look at:

  1. Historical Track Record: What has Li-Cycle Holdings' 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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Li-Cycle Holdings' board and the CEO’s background.

  3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here