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Microvast Holdings, Inc. (NASDAQ:MVST) Is Expected To Breakeven In The Near Future

Microvast Holdings, Inc. (NASDAQ:MVST) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Microvast Holdings, Inc. designs, develops, and manufactures battery systems for electric vehicles and energy storage systems in the United States, China, rest of the Asia Pacific, and Europe. On 31 December 2022, the US$382m market-cap company posted a loss of US$158m for its most recent financial year. The most pressing concern for investors is Microvast Holdings' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Microvast Holdings

Expectations from some of the American Machinery analysts is that Microvast Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$18m in 2025. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 60%, which is extremely buoyant. 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

We're not going to go through company-specific developments for Microvast Holdings given that this is a high-level summary, however, take into account that generally 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 26% 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 Microvast Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Microvast Holdings' company page on Simply Wall St. We've also put together a list of key factors you should look at:

  1. Valuation: What is Microvast Holdings 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 Microvast Holdings 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 Microvast Holdings’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.

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