Smart Share Global Limited (NASDAQ:EM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Smart Share Global Limited, a consumer tech company, provides mobile device charging services in the People's Republic of China. The US$295m market-cap company’s loss lessened since it announced a CN¥5.0b loss in the full financial year, compared to the latest trailing-twelve-month loss of CN¥236m, as it approaches breakeven. Many investors are wondering about the rate at which Smart Share Global will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Consensus from 3 of the American Specialty Retail analysts is that Smart Share Global is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of CN¥277m in 2023. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 103% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Smart Share Global's growth isn’t the focus of this broad overview, though, take into account 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 5.0% 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 important factors you should further examine:
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.