American Superconductor Corporation (NASDAQ:AMSC) On The Verge Of Breaking Even

With the business potentially at an important milestone, we thought we'd take a closer look at American Superconductor Corporation's (NASDAQ:AMSC) future prospects. American Superconductor Corporation, together with its subsidiaries, provides megawatt-scale power resiliency solutions worldwide. The US$1.2b market-cap company posted a loss in its most recent financial year of US$11m and a latest trailing-twelve-month loss of US$865k shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which American Superconductor 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 American Superconductor

According to the 3 industry analysts covering American Superconductor, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$4.4m in 2025. The company is therefore projected to breakeven around 12 months 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 91%, 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 American Superconductor's upcoming projects, however, bear in mind that typically 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 aspect worth mentioning. American Superconductor currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of 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:

There are key fundamentals of American Superconductor 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 American Superconductor, take a look at American Superconductor's company page on Simply Wall St. We've also compiled a list of important factors you should further research:

1. Valuation: What is American Superconductor 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 American Superconductor 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 American Superconductor’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.