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 provides water and wastewater treatment and reuse solutions for the municipal, commercial, and industrial markets worldwide. The AU$144m market-cap company’s loss lessened since it announced a US$31m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$12m, as it approaches breakeven. The most pressing concern for investors is Fluence's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Fluence is bordering on breakeven, according to some Australian Machinery analysts. They expect the company to post a final loss in 2020, before turning a profit of US$4.0m in 2021. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 54% 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.
Given this is a high-level overview, we won’t go into details of Fluence's upcoming projects, but, keep in mind that generally 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up -7.9% 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.
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 essential aspects you should look at:
- 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.
- 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.
- 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. 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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