When Can We Expect A Profit From HydrogenPro AS (OB:HYPRO)?

We feel now is a pretty good time to analyse HydrogenPro AS' (OB:HYPRO) business as it appears the company may be on the cusp of a considerable accomplishment. HydrogenPro AS designs and supplies customized hydrogen plants for industrial clients. On 31 December 2020, the kr1.1b market-cap company posted a loss of kr16m for its most recent financial year. As path to profitability is the topic on HydrogenPro's investors mind, we've decided to gauge market sentiment. 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 HydrogenPro

According to some industry analysts covering HydrogenPro, breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of kr46m in 2023. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 33% 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.

Given this is a high-level overview, we won’t go into details of HydrogenPro's upcoming projects, but, take into account 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 quite unusual for a cash-burning 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 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 compiled a list of essential factors you should further research:

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.

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.

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