Loss-Making Nanoveu Limited (ASX:NVU) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Nanoveu Limited's (ASX:NVU) future prospects. Nanoveu Limited, a technology company, develops and sells nanotechnology applications for consumer devices in the Americas and internationally. On 31 December 2021, the AU$7.1m market-cap company posted a loss of AU$2.3m for its most recent financial year. The most pressing concern for investors is Nanoveu'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.

View our latest analysis for Nanoveu

Expectations from some of the Australian Electronic analysts is that Nanoveu is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$200k in 2023. The company is therefore projected to breakeven just over a year 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 134% 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 Nanoveu's upcoming projects, but, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Nanoveu currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Nanoveu, so if you are interested in understanding the company at a deeper level, take a look at Nanoveu's company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Valuation: What is Nanoveu 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 Nanoveu 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 Nanoveu’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.