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Market Sentiment Around Loss-Making Worksport Ltd. (NASDAQ:WKSP)

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·2 min read
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Worksport Ltd. (NASDAQ:WKSP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Worksport Ltd., through its subsidiary, designs, manufactures, and distributes truck tonneau covers in Canada and the United States. With the latest financial year loss of US$1.2m and a trailing-twelve-month loss of US$4.3m, the US$42m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Worksport's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Worksport

Consensus from 3 of the American Auto Components analysts is that Worksport is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$2.5m in 2024. Therefore, the company is expected to breakeven roughly 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 62% 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 Worksport's growth isn’t the focus of this broad overview, but, keep in mind that generally 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 0.8% 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 Worksport to cover in one brief article, but the key fundamentals for the company can all be found in one place – Worksport's company page on Simply Wall St. We've also put together a list of important aspects you should look at:

  1. Valuation: What is Worksport 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 Worksport is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Worksport’s 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.