UGE International Ltd. (CVE:UGE): Are Analysts Optimistic?

We feel now is a pretty good time to analyse UGE International Ltd.'s (CVE:UGE) business as it appears the company may be on the cusp of a considerable accomplishment. UGE International Ltd. develops, builds, finances, owns, and operates commercial and community solar facilities in Canada, the United States, and the Philippines. The company’s loss has recently broadened since it announced a US$7.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$13m, moving it further away from breakeven. As path to profitability is the topic on UGE International's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for UGE International

According to the 3 industry analysts covering UGE International, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$393k in 2025. 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 58% 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.

Underlying developments driving UGE International's growth isn’t the focus of this broad overview, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with UGE International 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Valuation: What is UGE International 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 UGE International 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 UGE International’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.