Analysts Are Optimistic We'll See A Profit From Fluence Corporation Limited (ASX:FLC)

With the business potentially at an important milestone, we thought we'd take a closer look at Fluence Corporation Limited's (ASX:FLC) future prospects. Fluence Corporation Limited, together with its subsidiaries, provides water and wastewater treatment solutions for the municipal, commercial, and industrial markets worldwide. The AU$124m market-cap company announced a latest loss of US$15m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Fluence will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Fluence

According to some industry analysts covering Fluence, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$100k in 2024. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 62% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Fluence's upcoming projects, but, keep in mind that typically 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. Fluence currently has a debt-to-equity ratio of 146%. Generally, the rule of thumb is 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 in investing in the loss-making company.

Next Steps:

There are key fundamentals of Fluence 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 Fluence, take a look at Fluence's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Valuation: What is Fluence 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 Fluence 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 Fluence’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.

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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.

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