ADS-TEC Energy PLC (NASDAQ:ADSE) Could Be Less Than A Year Away From Profitability

ADS-TEC Energy PLC (NASDAQ:ADSE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ADS-TEC Energy PLC engages in the provision of intelligent and decentralized energy storage systems in Europe and North America. With the latest financial year loss of €55m and a trailing-twelve-month loss of €71m, the US$774m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on ADS-TEC Energy's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for ADS-TEC Energy

According to the 3 industry analysts covering ADS-TEC Energy, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of €6.1m in 2025. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 145%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of ADS-TEC Energy's upcoming projects, however, bear in mind 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. ADS-TEC Energy 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Historical Track Record: What has ADS-TEC Energy'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 ADS-TEC Energy'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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.