When Will Microvast Holdings, Inc. (NASDAQ:MVST) Become Profitable?
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. provides battery technologies for electric vehicles and energy storage solutions. The US$295m market-cap company’s loss lessened since it announced a US$158m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$115m, as it approaches breakeven. Many investors are wondering about the rate at which Microvast Holdings will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Microvast Holdings
Microvast Holdings is bordering on breakeven, according to the 4 American Machinery analysts. They expect the company to post a final loss in 2025, before turning a profit of US$23m in 2026. 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 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% 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.
We're not going to go through company-specific developments for Microvast Holdings given that this is a high-level summary, however, bear in mind that by and large 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 prudently, with debt making up 24% 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:
This article is not intended to be a comprehensive analysis on Microvast Holdings, so if you are interested in understanding the company at a deeper level, take a look at Microvast Holdings' company page on Simply Wall St. We've also put together a list of key aspects you should look at:
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.
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.
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.
