When Will CHAR Technologies Ltd. (CVE:YES) Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at CHAR Technologies Ltd.'s (CVE:YES) future prospects. CHAR Technologies Ltd., a cleantech development and services company, engages in the conversion of organic waste into renewable gases and biocarbon products. The company’s loss has recently broadened since it announced a CA$8.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$9.7m, moving it further away from breakeven. As path to profitability is the topic on CHAR Technologies' 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.

See our latest analysis for CHAR Technologies

CHAR Technologies is bordering on breakeven, according to some Canadian Commercial Services analysts. They expect the company to post a final loss in 2024, before turning a profit of CA$3.5m in 2025. So, the company is predicted to breakeven just over a year from now. 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 60% 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, but, keep in mind that typically 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 CHAR Technologies is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in CHAR Technologies' case is 50%. 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 put together a list of pertinent factors you should look at:

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.