When Will NEXE Innovations Inc. (CVE:NEXE) Become Profitable?

By
Simply Wall St
Published
May 11, 2022
TSXV:NEXE
Source: Shutterstock

NEXE Innovations Inc. (CVE:NEXE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. NEXE Innovations Inc. designs, develops, manufactures, and sells plant-based single-serve coffee pods for use in single-serve coffee machines. The CA$38m market-cap company posted a loss in its most recent financial year of CA$17m and a latest trailing-twelve-month loss of CA$15m shrinking the gap between loss and breakeven. The most pressing concern for investors is NEXE Innovations' path to profitability – when will it 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 NEXE Innovations

NEXE Innovations is bordering on breakeven, according to some Canadian Packaging analysts. They expect the company to post a final loss in 2022, before turning a profit of CA$117k in 2023. Therefore, the company is expected 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 126% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
TSXV:NEXE Earnings Per Share Growth May 11th 2022

Given this is a high-level overview, we won’t go into details of NEXE Innovations' upcoming projects, but, take into account 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 2.8% 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:

There are too many aspects of NEXE Innovations to cover in one brief article, but the key fundamentals for the company can all be found in one place – NEXE Innovations' company page on Simply Wall St. We've also put together a list of key factors you should look at:

  1. Historical Track Record: What has NEXE Innovations' 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 NEXE Innovations' 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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