When Will Electrameccanica Vehicles Corp. (NASDAQ:SOLO) Breakeven?

Electrameccanica Vehicles Corp. (NASDAQ:SOLO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Electrameccanica Vehicles Corp., a development-stage company, develops, manufactures, and sells electric vehicles in Canada. The US$152m market-cap company posted a loss in its most recent financial year of US$41m and a latest trailing-twelve-month loss of US$59m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Electrameccanica Vehicles 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 Electrameccanica Vehicles

Electrameccanica Vehicles is bordering on breakeven, according to the 2 American Auto analysts. They expect the company to post a final loss in 2023, before turning a profit of US$22m in 2024. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 73% 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 Electrameccanica Vehicles' growth isn’t the focus of this broad overview, 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’d like to point out is that Electrameccanica Vehicles has no debt on its balance sheet, which is rare for a loss-making 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 Electrameccanica Vehicles, so if you are interested in understanding the company at a deeper level, take a look at Electrameccanica Vehicles' company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Valuation: What is Electrameccanica Vehicles 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 Electrameccanica Vehicles 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 Electrameccanica Vehicles’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.