MagneGas Corporation’s (NASDAQ:MNGA): MagneGas Corporation, an alternative energy company, creates and produces hydrogen based fuel through the gasification of liquid and liquid waste in the United States and internationally. With the latest financial year loss of -US$16.00M and a trailing-twelve month of -US$18.17M, the US$7.19M market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is MNGA’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for MNGA.
Expectation from analysts is MNGA is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$1.35M in 2021. Therefore, MNGA is expected to breakeven roughly 3 years from today. In order to meet this breakeven date, I calculated the rate at which MNGA must grow year-on-year. It turns out an average annual growth rate of 61.45% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, MNGA may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of MNGA’s upcoming projects, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one aspect worth mentioning. MNGA has managed its capital prudently, with debt making up 6.22% of equity. This means that MNGA 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 MNGA to cover in one brief article, but the key fundamentals for the company can all be found in one place – MNGA’s company page on Simply Wall St. I’ve also put together a list of key factors you should further examine:
- Valuation: What is MNGA 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 MNGA 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 MagneGas’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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.