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Envirosuite Limited’s (ASX:EVS): Envirosuite Limited develops and sells a technology platform. The AU$29m market-cap company announced a latest loss of -AU$5.8m on 30 June 2018 for its most recent financial year result. Many investors are wondering the rate at which EVS will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for EVS, its year of breakeven and its implied growth rate.
Check out our latest analysis for Envirosuite
EVS is bordering on breakeven, according to Software analysts. They expect the company to post a final loss in 2019, before turning a profit of AU$1.4m in 2020. EVS is therefore projected to breakeven around 2 years from today. What rate will EVS have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 142%, 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, I won’t go into details of EVS’s upcoming projects, though, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that EVS has managed its capital prudently, with debt making up 2.7% of equity. This means that EVS has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of EVS to cover in one brief article, but the key fundamentals for the company can all be found in one place – EVS’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further examine:
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Valuation: What is EVS 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 EVS is currently mispriced by the market.
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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 Envirosuite’s board and the CEO’s back ground.
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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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.