When Will Capstone Green Energy Corporation (NASDAQ:CGRN) Breakeven?




  • In Business
  • 2022-09-30 10:41:37Z
  • By Simply Wall St.
 

With the business potentially at an important milestone, we thought we'd take a closer look at Capstone Green Energy Corporation's (NASDAQ:CGRN) future prospects. Capstone Green Energy Corporation develops, manufactures, markets, and services microturbine technology solutions for use in stationary distributed power generation and distribution networks applications worldwide. With the latest financial year loss of US$20m and a trailing-twelve-month loss of US$20m, the US$33m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Capstone Green Energy'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 Capstone Green Energy

Consensus from 3 of the American Electrical analysts is that Capstone Green Energy is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$3.8m in 2025. Therefore, the company is expected to breakeven roughly 3 years from today. 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 69% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Capstone Green Energy's growth isn't the focus of this broad overview, however, 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.

Before we wrap up, there's one issue worth mentioning. Capstone Green Energy currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn't exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Capstone Green Energy, so if you are interested in understanding the company at a deeper level, take a look at Capstone Green Energy's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:

  1. Historical Track Record: What has Capstone Green Energy'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 Capstone Green Energy'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.

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