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We feel now is a pretty good time to analyse Wolftank Group AG's (ETR:WAH) business as it appears the company may be on the cusp of a considerable accomplishment. Wolftank Group AG, together with its subsidiaries, provides specialized technologies for energy and environmental solutions worldwide. The company’s loss has recently broadened since it announced a €3.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of €3.4m, moving it further away from breakeven. Many investors are wondering about the rate at which Wolftank Group will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Wolftank Group
Consensus from 3 of the German Commercial Services analysts is that Wolftank Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of €1.7m in 2025. 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 111% is expected, 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 Wolftank Group's growth isn’t the focus of this broad overview, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Wolftank Group is its debt-to-equity ratio of 117%. 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 in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Wolftank Group, so if you are interested in understanding the company at a deeper level, take a look at Wolftank Group's company page on Simply Wall St. We've also put together a list of key factors you should further research:
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Valuation: What is Wolftank Group 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 Wolftank Group 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 Wolftank Group’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.