Envirosuite Limited (ASX:EVS): When Will It Breakeven?

We feel now is a pretty good time to analyse Envirosuite Limited's (ASX:EVS) business as it appears the company may be on the cusp of a considerable accomplishment. Envirosuite Limited develops and sells environmental management technology solutions. The AU$83m market-cap company announced a latest loss of AU$10m on 30 June 2023 for its most recent financial year result. As path to profitability is the topic on Envirosuite's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Envirosuite

According to the 3 industry analysts covering Envirosuite, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$1.7m in 2026. The company is therefore projected to breakeven around 3 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 77% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Envirosuite given that this is a high-level summary, but, bear in mind that by and large 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 1.3% 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 Envirosuite 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 Envirosuite, take a look at Envirosuite's company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Valuation: What is Envirosuite 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 Envirosuite 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 Envirosuite’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.