Loss-Making Invinity Energy Systems plc (LON:IES) Expected To Breakeven In The Medium-Term

We feel now is a pretty good time to analyse Invinity Energy Systems plc's (LON:IES) business as it appears the company may be on the cusp of a considerable accomplishment. Invinity Energy Systems plc manufactures and sells vanadium flow batteries (VFB) for energy storage solutions in the United Kingdom, Canada, the United States, Australia, and China. The company’s loss has recently broadened since it announced a UK£19m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£20m, moving it further away from breakeven. As path to profitability is the topic on Invinity Energy Systems' 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.

View our latest analysis for Invinity Energy Systems

Consensus from 4 of the British Electrical analysts is that Invinity Energy Systems is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of UK£12m in 2025. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 73% 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.

Given this is a high-level overview, we won’t go into details of Invinity Energy Systems' upcoming projects, though, keep 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 we wrap up, there’s one aspect worth mentioning. Invinity Energy Systems currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Invinity Energy Systems, so if you are interested in understanding the company at a deeper level, take a look at Invinity Energy Systems' company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Valuation: What is Invinity Energy Systems 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 Invinity Energy Systems 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 Invinity Energy Systems’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. 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.