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With the business potentially at an important milestone, we thought we'd take a closer look at CHAR Technologies Ltd.'s (CVE:YES) future prospects. CHAR Technologies Ltd., a cleantech development and services company, engages in the conversion of organic waste into renewable gases and biocarbon products. With the latest financial year loss of CA$8.4m and a trailing-twelve-month loss of CA$9.4m, the CA$21m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which CHAR Technologies will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for CHAR Technologies
CHAR Technologies is bordering on breakeven, according to some Canadian Commercial Services analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of CA$10m in 2027. The company is therefore projected to breakeven around 3 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 58%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of CHAR Technologies' upcoming projects, however, take into account that typically 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 CHAR Technologies is its debt-to-equity ratio of 107%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on CHAR Technologies, so if you are interested in understanding the company at a deeper level, take a look at CHAR Technologies' company page on Simply Wall St. We've also compiled a list of key factors you should further research:
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Historical Track Record: What has CHAR Technologies' 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 CHAR Technologies' 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.