Loss-Making CHAR Technologies Ltd. (CVE:YES) Expected To Breakeven In The Medium-Term

CHAR Technologies Ltd. (CVE:YES) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. CHAR Technologies Ltd. engages in converting woody materials and organic waste into renewable gases and biocarbon. The CA$29m market-cap company’s loss lessened since it announced a CA$7.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$7.0m, as it approaches breakeven. Many investors are wondering about the rate at which CHAR Technologies will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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According to some industry analysts covering CHAR Technologies, breakeven is near. They anticipate the company to incur a final loss in 2027, before generating positive profits of CA$6.6m in 2028. So, the company is predicted to breakeven approximately 3 years 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 71% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving CHAR Technologies' growth isn’t the focus of this broad overview, however, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Check out our latest analysis for CHAR Technologies

One thing we would like to bring into light with CHAR Technologies is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. 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 CHAR Technologies, so if you are interested in understanding the company at a deeper level, take a look at CHAR Technologies' company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:

1. Historical Track Record: What has CHAR Technologies' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CHAR Technologies' 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.