Fluence Corporation Limited (ASX:FLC): Are Analysts Optimistic?

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, together with its subsidiaries, provides water and wastewater treatment solutions for the municipal, commercial, and industrial markets worldwide. With the latest financial year loss of US$15m and a trailing-twelve-month loss of US$17m, the AU$61m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Fluence will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Fluence

Consensus from 2 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 2025, before generating positive profits of US$250k in 2026. So, the company is predicted 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 91% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Fluence's growth isn’t the focus of this broad overview, but, take into account that typically 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 issue worth mentioning. Fluence currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

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.