Breakeven On The Horizon For ENGIE Eps S.A. (EPA:EPS)

With the business potentially at an important milestone, we thought we'd take a closer look at ENGIE Eps S.A.'s (EPA:EPS) future prospects. ENGIE Eps S.A. operates in the sustainable energy sector. The €232m market-cap company announced a latest loss of €15m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which ENGIE Eps will turn a profit, with the big question being “when will the company 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 ENGIE Eps

According to some industry analysts covering ENGIE Eps, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of €2.0m in 2022. 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 116% 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.

Given this is a high-level overview, we won’t go into details of ENGIE Eps' upcoming projects, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with ENGIE Eps is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Valuation: What is ENGIE Eps 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 ENGIE Eps 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 ENGIE Eps’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. 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.
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