Market Sentiment Around Loss-Making NeoVolta Inc. (NASDAQ:NEOV)

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. The US$67m market-cap company posted a loss in its most recent financial year of US$2.6m and a latest trailing-twelve-month loss of US$2.4m shrinking the gap between loss and breakeven. As path to profitability is the topic on NeoVolta's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for NeoVolta

NeoVolta is bordering on breakeven, according to some American Electrical analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$2.7m in 2025. The company is therefore projected to breakeven around 2 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 152%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

We're not going to go through company-specific developments for NeoVolta given that this is a high-level summary, but, keep in mind that generally 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 usually has a high level of 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:

There are too many aspects of NeoVolta to cover in one brief article, but the key fundamentals for the company can all be found in one place – NeoVolta's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

1. 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.

2. 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.

3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.