When Can We Expect A Profit From Harvest Technology Group Ltd (ASX:HTG)?

Harvest Technology Group Ltd (ASX:HTG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Harvest Technology Group Limited provides offshore solutions and engineering services for subsea intervention projects and asset integrity risk mitigation primarily in Australia. The AU$217m market-cap company announced a latest loss of AU$6.0m on 30 June 2020 for its most recent financial year result. As path to profitability is the topic on Harvest Technology Group's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Harvest Technology Group

According to some industry analysts covering Harvest Technology Group, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$6.0m in 2022. The company is therefore projected to breakeven just over a year from today. 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 132% 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.

Given this is a high-level overview, we won’t go into details of Harvest Technology Group's upcoming projects, however, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 29% 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:

This article is not intended to be a comprehensive analysis on Harvest Technology Group, so if you are interested in understanding the company at a deeper level, take a look at Harvest Technology Group'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 Harvest Technology Group 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 Harvest Technology Group 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 Harvest Technology Group’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.

If you’re looking to trade Harvest Technology Group, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade 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.