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We feel now is a pretty good time to analyse ADS-TEC Energy PLC's (NASDAQ:ADSE) business as it appears the company may be on the cusp of a considerable accomplishment. ADS-TEC Energy PLC engages in the provision of intelligent and decentralized energy storage systems in Europe and North America. With the latest financial year loss of €55m and a trailing-twelve-month loss of €71m, the US$774m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on ADS-TEC Energy's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for ADS-TEC Energy
Consensus from 3 of the American Electrical analysts is that ADS-TEC Energy is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of €6.1m in 2025. So, the company is predicted to breakeven approximately 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 145%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving ADS-TEC Energy's growth isn’t the focus of this broad overview, but, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. ADS-TEC Energy currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
This article is not intended to be a comprehensive analysis on ADS-TEC Energy, so if you are interested in understanding the company at a deeper level, take a look at ADS-TEC Energy's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:
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Historical Track Record: What has ADS-TEC Energy's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ADS-TEC Energy's board and the CEO’s background.
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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.