We feel now is a pretty good time to analyse Smart Share Global Limited's (NASDAQ:EM) business as it appears the company may be on the cusp of a considerable accomplishment. Smart Share Global Limited, a consumer tech company, provides mobile device charging services in the People's Republic of China. The US$210m market-cap company announced a latest loss of CN¥711m on 31 December 2022 for its most recent financial year result. The most pressing concern for investors is Smart Share Global's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 3 industry analysts covering Smart Share Global, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of CN¥108m in 2023. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 95%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Smart Share Global's upcoming projects, however, 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.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 4.1% 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.
There are key fundamentals of Smart Share Global 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 Smart Share Global, take a look at Smart Share Global's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:
Valuation: What is Smart Share Global 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 Smart Share Global 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 Smart Share Global’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.
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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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