Analysts Expect Breakeven For Carbon Revolution Limited (ASX:CBR) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Carbon Revolution Limited's (ASX:CBR) future prospects. Carbon Revolution Limited designs, manufactures, and markets single piece carbon fiber wheels to original equipment manufacturers worldwide. The AU$366m market-cap company posted a loss in its most recent financial year of AU$114m and a latest trailing-twelve-month loss of AU$30m shrinking the gap between loss and breakeven. As path to profitability is the topic on Carbon Revolution'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.

View our latest analysis for Carbon Revolution

Carbon Revolution is bordering on breakeven, according to the 2 Australian Auto Components analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$6.1m in 2023. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 70% 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.

Underlying developments driving Carbon Revolution's growth isn’t the focus of this broad overview, though, take into account 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 The company has managed its capital prudently, with debt making up 21% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Carbon Revolution which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Carbon Revolution, take a look at Carbon Revolution's company page on Simply Wall St. We've also put together a list of key aspects you should look at:

1. Valuation: What is Carbon Revolution 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 Carbon Revolution is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Carbon Revolution’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.

When trading Carbon Revolution or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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