Yahoo Finance Loss-Making Invinity Energy Systems plc (LON:IES) Expected To Breakeven In The Medium-Term
We feel now is a pretty good time to analyse Invinity Energy Systems plc's (LON:IES) business as it appears the company may be on the cusp of a considerable accomplishment. Invinity Energy Systems plc manufactures and sells vanadium flow batteries (VFB) for energy storage solutions in the United Kingdom, Canada, the United States, Australia, and China. The UK£76m market-cap company posted a loss in its most recent financial year of UK£19m and a latest trailing-twelve-month loss of UK£20m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Invinity Energy Systems' path to profitability – when will it breakeven? 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 Invinity Energy Systems
According to the 4 industry analysts covering Invinity Energy Systems, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK£12m in 2025. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 73% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Invinity Energy Systems given that this is a high-level summary, though, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Invinity Energy Systems 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. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on Invinity Energy Systems, so if you are interested in understanding the company at a deeper level, take a look at Invinity Energy Systems' company page on Simply Wall St. We've also put together a list of relevant factors you should further research:
Valuation: What is Invinity Energy Systems 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 Invinity Energy Systems is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Invinity Energy Systems’s board and the CEO’s background.
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.
