Flux Power Holdings, Inc. (NASDAQ:FLUX): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at Flux Power Holdings, Inc.'s (NASDAQ:FLUX) future prospects. Flux Power Holdings, Inc., through its subsidiary Flux Power, Inc., designs, develops, manufactures, and sells lithium-ion energy storage solutions for lift trucks, airport ground support equipment, and other industrial and commercial applications in the North America. With the latest financial year loss of US$6.7m and a trailing-twelve-month loss of US$7.0m, the US$55m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Flux Power Holdings will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Flux Power Holdings

Flux Power Holdings is bordering on breakeven, according to the 5 American Electrical analysts. They expect the company to post a final loss in 2025, before turning a profit of US$4.4m in 2026. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 53%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Flux Power Holdings' upcoming projects, though, take into account that by and large 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 issue worth mentioning. Flux Power Holdings currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Flux Power Holdings 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 Flux Power Holdings 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 Flux Power Holdings’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.