When Will Lightning eMotors, Inc. (NYSE:ZEV) Become Profitable?
With the business potentially at an important milestone, we thought we'd take a closer look at Lightning eMotors, Inc.'s (NYSE:ZEV) future prospects. Lightning eMotors, Inc. designs, manufactures, and sells zero-emission commercial fleet vehicles and powertrains to commercial fleets, large enterprises, original equipment manufacturers, and governments in the United States. The US$144m market-cap company posted a loss in its most recent financial year of US$101m and a latest trailing-twelve-month loss of US$2.3m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Lightning eMotors will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Lightning eMotors
According to the 5 industry analysts covering Lightning eMotors, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$3.8m in 2024. So, the company is predicted to breakeven approximately 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 81% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Lightning eMotors' growth isn’t the focus of this broad overview, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Lightning eMotors is its debt-to-equity ratio of 130%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Lightning eMotors which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Lightning eMotors, take a look at Lightning eMotors' company page on Simply Wall St. We've also put together a list of key aspects you should look at:
Valuation: What is Lightning eMotors 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 Lightning eMotors 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 Lightning eMotors’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.
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.
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