Loss-Making EHang Holdings Limited (NASDAQ:EH) Set To Breakeven

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$1.3b market-cap company’s loss lessened since it announced a CN¥76m loss in the full financial year, compared to the latest trailing-twelve-month loss of CN¥54m, as it approaches breakeven. The most pressing concern for investors is EHang Holdings' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 127% year-on-year, on average, 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, though, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. 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 essential aspects you should further research:

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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