When Will GreenPower Motor Company Inc. (CVE:GPV) Breakeven?

By
Simply Wall St
Published
June 10, 2021
TSXV:GPV
Source: Shutterstock

GreenPower Motor Company Inc. (CVE:GPV) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. GreenPower Motor Company Inc. develops, manufactures, and distributes electric vehicles for commercial markets in the United States and Canada. The CA$448m market-cap company posted a loss in its most recent financial year of US$5.1m and a latest trailing-twelve-month loss of US$7.2m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on GreenPower Motor'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.

See our latest analysis for GreenPower Motor

Consensus from 5 of the Canadian Machinery analysts is that GreenPower Motor is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$3.1m in 2022. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 54% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
TSXV:GPV Earnings Per Share Growth June 10th 2021

Given this is a high-level overview, we won’t go into details of GreenPower Motor's upcoming projects, however, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 2.1% 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 GreenPower Motor, so if you are interested in understanding the company at a deeper level, take a look at GreenPower Motor's company page on Simply Wall St. We've also put together a list of important factors you should further research:

  1. Valuation: What is GreenPower Motor 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 GreenPower Motor 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 GreenPower Motor’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. 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.
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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.