When Will SFC Energy AG (ETR:F3C) Turn A Profit?

SFC Energy AG's (ETR:F3C): SFC Energy AG develops, produces, and distributes power generation systems and components for off-grid and on-grid applications based on fuel cells and other technologies in North America, Germany, rest of Europe, Asia, and internationally. With the latest financial year loss of -€517.0 and a trailing-twelve month of -€2.2m, the €118m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on F3C’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for F3C, its year of breakeven and its implied growth rate.

View our latest analysis for SFC Energy

Consensus from the 4 Electrical analysts is F3C is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of €100k in 2020. So, F3C is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which F3C must grow year-on-year. It turns out an average annual growth rate of 120% is expected, which is rather optimistic! If this rate turns out to be too aggressive, F3C may become profitable much later than analysts predict.

Given this is a high-level overview, I won’t go into details of F3C’s upcoming projects, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. F3C has managed its capital judiciously, with debt making up 17% of equity. This means that F3C 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 F3C, so if you are interested in understanding the company at a deeper level, take a look at F3C’s company page on Simply Wall St. I’ve also compiled a list of important factors you should look at:

1. Valuation: What is F3C 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 F3C 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 SFC Energy’s board and the CEO’s back ground.
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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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