Loss-Making Novavis Group S.A. (WSE:NVG) Set To Breakeven

We feel now is a pretty good time to analyse Novavis Group S.A.'s (WSE:NVG) business as it appears the company may be on the cusp of a considerable accomplishment. Novavis Group S.A. engages in developing, designing, and executing renewable energy sources projects in Poland. The zł77m market-cap company’s loss lessened since it announced a zł1.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of zł843k, as it approaches breakeven. The most pressing concern for investors is Novavis Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Novavis Group

According to some industry analysts covering Novavis Group, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of zł15m in 2023. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 49% 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 Novavis Group's growth isn’t the focus of this broad overview, however, take into account that by and large 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. Novavis Group currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Novavis Group's case is 51%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Novavis Group 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 Novavis Group, take a look at Novavis Group's company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

1. Historical Track Record: What has Novavis Group's 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 Novavis Group'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.