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

We feel now is a pretty good time to analyse Fluence Corporation Limited's (ASX:FLC) business as it appears the company may be on the cusp of a considerable accomplishment. Fluence Corporation Limited, together with its subsidiaries, provides smart water and wastewater treatment solutions for the municipal, commercial, and industrial markets worldwide. With the latest financial year loss of US$21m and a trailing-twelve-month loss of US$16m, the AU$66m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Fluence will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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Expectations from some of the Australian Water Utilities analysts is that Fluence is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$300k in 2025. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 120%, 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, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for Fluence

One thing we would like to bring into light with Fluence is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

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 put together a list of pertinent factors 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.