Breakeven On The Horizon For Microvast Holdings, Inc. (NASDAQ:MVST)

We feel now is a pretty good time to analyse Microvast Holdings, Inc.'s (NASDAQ:MVST) business as it appears the company may be on the cusp of a considerable accomplishment. Microvast Holdings, Inc. provides battery technologies for electric vehicles and energy storage solutions. The US$318m market-cap company’s loss lessened since it announced a US$158m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$115m, as it approaches breakeven. Many investors are wondering about the rate at which Microvast Holdings will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Microvast Holdings

According to the 4 industry analysts covering Microvast Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$23m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Microvast Holdings given that this is a high-level summary, but, 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. The company has managed its capital judiciously, with debt making up 24% 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 Microvast 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 Microvast Holdings, take a look at Microvast Holdings' company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

1. Valuation: What is Microvast 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 Microvast 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 Microvast 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.