Clean TeQ Holdings Limited’s (ASX:CLQ): Clean TeQ Holdings Limited, together with its subsidiaries, provides metals recovery and industrial water treatment services primarily in Australia. The AU$254m market-cap posted a loss in its most recent financial year of -AU$17.9m and a latest trailing-twelve-month loss of -AU$17.9m shrinking the gap between loss and breakeven. The most pressing concern for investors is CLQ’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for CLQ, its year of breakeven and its implied growth rate.
CLQ is bordering on breakeven, according to the 2 Commercial Services analysts. They expect the company to post a final loss in 2021, before turning a profit of AU$18m in 2022. So, CLQ is predicted to breakeven approximately 3 years from now. How fast will CLQ have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 19% year-on-year, on average, which is relatively reasonable. However, if this rate turns out to be too buoyant, CLQ may become profitable later than analysts predict.
Given this is a high-level overview, I won’t go into details of CLQ’s upcoming projects, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that CLQ has managed its capital prudently, with debt making up 0.06% of equity. This means that CLQ has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of CLQ to cover in one brief article, but the key fundamentals for the company can all be found in one place – CLQ’s company page on Simply Wall St. I’ve also put together a list of important aspects you should further examine:
- Historical Track Record: What has CLQ’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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Clean TeQ Holdings’s board and the CEO’s back ground.
- 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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