We feel now is a pretty good time to analyse NeoVolta Inc.'s (NASDAQ:NEOV) business as it appears the company may be on the cusp of a considerable accomplishment. NeoVolta Inc. designs, manufactures, and sells energy storage systems in the United States. With the latest financial year loss of US$5.8m and a trailing-twelve-month loss of US$3.4m, the US$100m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on NeoVolta's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for NeoVolta
According to some industry analysts covering NeoVolta, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$200k in 2024. 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 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 119% year-on-year, on average, 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.
Given this is a high-level overview, we won’t go into details of NeoVolta's upcoming projects, but, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that NeoVolta has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on NeoVolta, so if you are interested in understanding the company at a deeper level, take a look at NeoVolta's company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:
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Historical Track Record: What has NeoVolta'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 NeoVolta'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.