Alelion Energy Systems AB (publ)'s (STO:ALELIO) Path To Profitability

We feel now is a pretty good time to analyse Alelion Energy Systems AB (publ)'s (STO:ALELIO) business as it appears the company may be on the cusp of a considerable accomplishment. Alelion Energy Systems AB (publ) engages in the development, manufacture, and sale of lithium-ion battery systems to industrial customers in Sweden. With the latest financial year loss of kr70m and a trailing-twelve-month loss of kr59m, the kr95m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Alelion Energy Systems will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Alelion Energy Systems

According to some industry analysts covering Alelion Energy Systems, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of kr10m in 2024. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 107% is expected, which is extremely buoyant. 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 Alelion Energy Systems given that this is a high-level summary, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Alelion Energy Systems is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of Alelion Energy Systems to cover in one brief article, but the key fundamentals for the company can all be found in one place – Alelion Energy Systems' company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

1. Historical Track Record: What has Alelion Energy Systems' 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 Alelion Energy Systems' 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.