HydrogenPro AS' (OB:HYPRO) Profit Outlook

HydrogenPro AS (OB:HYPRO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. HydrogenPro AS designs and supplies customized hydrogen plants for industrial clients. On 31 December 2020, the kr1.4b market-cap company posted a loss of kr16m for its most recent financial year. Many investors are wondering about the rate at which HydrogenPro will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for HydrogenPro

HydrogenPro is bordering on breakeven, according to the 2 Norwegian Machinery analysts. They expect the company to post a final loss in 2021, before turning a profit of kr128m in 2022. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 60% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving HydrogenPro's growth isn’t the focus of this broad overview, however, bear in mind that typically 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. HydrogenPro currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Valuation: What is HydrogenPro 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 HydrogenPro 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 HydrogenPro’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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