SPI Energy Co., Ltd. (NASDAQ:SPI) Could Be Less Than A Year Away From Profitability
With the business potentially at an important milestone, we thought we'd take a closer look at SPI Energy Co., Ltd.'s (NASDAQ:SPI) future prospects. SPI Energy Co., Ltd. provides photovoltaic and electric vehicle (EV) solutions for business, residential, government, and utility customers and investors in Australia, Japan, Italy, the United States, the United Kingdom, and Greece. The company’s loss has recently broadened since it announced a US$33m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$36m, moving it further away from breakeven. As path to profitability is the topic on SPI Energy'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.
See our latest analysis for SPI Energy
SPI Energy is bordering on breakeven, according to some American Semiconductor analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$28m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 121% is expected, which is rather optimistic! 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 SPI Energy's upcoming projects, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with SPI Energy is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of SPI Energy 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 SPI Energy, take a look at SPI Energy's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:
Valuation: What is SPI Energy 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 SPI Energy 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 SPI Energy’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.
