Electrovaya Inc. (TSE:ELVA) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse Electrovaya Inc.'s (TSE:ELVA) business as it appears the company may be on the cusp of a considerable accomplishment. Electrovaya Inc. engages in the design, development, manufacture, and sale of lithium-ion batteries, battery management systems, and battery-related products for energy storage, clean electric transportation, and other specialized applications in North America. The CA$145m market-cap company announced a latest loss of US$1.5m on 30 September 2024 for its most recent financial year result. Many investors are wondering about the rate at which Electrovaya 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.

Check out our latest analysis for Electrovaya

Consensus from 4 of the Canadian Electrical analysts is that Electrovaya is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$2.7m in 2025. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 46% is expected, 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 Electrovaya's upcoming projects, but, keep in mind that generally 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 issue worth mentioning. Electrovaya currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Electrovaya 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 Electrovaya 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 Electrovaya’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.