When Will MAST Energy Developments PLC (LON:MAST) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at MAST Energy Developments PLC's (LON:MAST) future prospects. MAST Energy Developments PLC engages in the development and production of power generation projects in the United Kingdom. The company’s loss has recently broadened since it announced a UK£1.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£1.1m, moving it further away from breakeven. Many investors are wondering about the rate at which MAST Energy Developments 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.

View our latest analysis for MAST Energy Developments

According to some industry analysts covering MAST Energy Developments, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of UK£100k in 2024. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 110%, 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 MAST Energy Developments given that this is a high-level summary, but, take into account that generally 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. MAST Energy Developments currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in MAST Energy Developments' case is 73%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is MAST Energy Developments 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 MAST Energy Developments 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 MAST Energy Developments’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.