Ecoslops S.A. (EPA:ALESA): Is Breakeven Near?

Ecoslops S.A. (EPA:ALESA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ecoslops SA produces recycled marine fuels from oil residues. The company’s loss has recently broadened since it announced a €1.7m loss in the full financial year, compared to the latest trailing-twelve-month loss of €3.5m, moving it further away from breakeven. The most pressing concern for investors is Ecoslops' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Ecoslops

Ecoslops is bordering on breakeven, according to the 2 French Commercial Services analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of €1.5m in 2021. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 97% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Ecoslops given that this is a high-level summary, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Ecoslops currently has a debt-to-equity ratio of 105%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Ecoslops which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Ecoslops, take a look at Ecoslops' 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 Ecoslops' 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 Ecoslops' 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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