When Can We Expect A Profit From Microvast Holdings, Inc. (NASDAQ:MVST)?

Microvast Holdings, Inc. (NASDAQ:MVST) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Microvast Holdings, Inc. designs, develops, and manufactures battery systems for electric vehicles and energy storage systems in the United States, China, rest of the Asia Pacific, and Europe. The US$507m 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$126m, as it approaches breakeven. As path to profitability is the topic on Microvast Holdings' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Microvast Holdings

Consensus from 2 of the American Machinery analysts is that Microvast Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$47m in 2025. 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 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, which signals high confidence from analysts. 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 Microvast Holdings given that this is a high-level summary, but, keep in mind 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 prudently, with debt making up 25% 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 too many aspects of Microvast Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Microvast Holdings' company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

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.