EHang Holdings Limited's (NASDAQ:EH) About To Shift From Loss To Profit

EHang Holdings Limited (NASDAQ:EH) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. EHang Holdings Limited operates as an autonomous aerial vehicle (AAV) technology platform company in the People’s Republic of China, Europe, North America, West Asia, and internationally. The US$1.9b market-cap company posted a loss in its most recent financial year of CN¥76m and a latest trailing-twelve-month loss of CN¥54m shrinking the gap between loss and breakeven. As path to profitability is the topic on EHang Holdings' 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 EHang Holdings

EHang Holdings is bordering on breakeven, according to the 2 American Aerospace & Defense analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of CN¥141m in 2021. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 127% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving EHang Holdings' growth isn’t the focus of this broad overview, but, keep in mind that by and large 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 4.5% 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:

This article is not intended to be a comprehensive analysis on EHang Holdings, so if you are interested in understanding the company at a deeper level, take a look at EHang Holdings' company page on Simply Wall St. We've also put together a list of pertinent 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. 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.
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