Analysts Expect Breakeven For EHang Holdings Limited (NASDAQ:EH) Before Long

We feel now is a pretty good time to analyse EHang Holdings Limited's (NASDAQ:EH) business as it appears the company may be on the cusp of a considerable accomplishment. EHang Holdings Limited operates as an autonomous aerial vehicle (AAV) technology platform company in the People’s Republic of China, East Asia, West Asia, Europe, and internationally. The US$742m market-cap company posted a loss in its most recent financial year of CN¥328m and a latest trailing-twelve-month loss of CN¥339m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is EHang Holdings' path to profitability – when will it breakeven? 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 EHang Holdings

According to some industry analysts covering EHang Holdings, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of CN¥191m in 2025. 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 110% is expected, which is rather optimistic! 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 EHang Holdings given that this is a high-level summary, but, take into account that generally 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 The company has managed its capital judiciously, with debt making up 19% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of EHang Holdings 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 EHang Holdings, take a look at EHang Holdings' company page on Simply Wall St. We've also put together a list of key aspects you should look at:

1. Historical Track Record: What has EHang Holdings' 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 EHang Holdings' 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.