Loss-Making Pioneer Power Solutions, Inc. (NASDAQ:PPSI) Expected To Breakeven In The Medium-Term

Pioneer Power Solutions, Inc. (NASDAQ:PPSI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Pioneer Power Solutions, Inc., together with its subsidiaries, design, manufacture, integrate, refurbish, distribute, sell, and service electric power systems, distributed energy resources, power generation equipment, and mobile EV charging solutions. The US$46m market-cap company posted a loss in its most recent financial year of US$3.3m and a latest trailing-twelve-month loss of US$4.3m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Pioneer Power Solutions' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Consensus from 2 of the American Electrical analysts is that Pioneer Power Solutions is on the verge of breakeven. They expect the company to post a final loss in 2026, before turning a profit of US$542k in 2027. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 74% 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.

Underlying developments driving Pioneer Power Solutions' growth isn’t the focus of this broad overview, though, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for Pioneer Power Solutions

One thing we’d like to point out is that Pioneer Power Solutions has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Pioneer Power Solutions, so if you are interested in understanding the company at a deeper level, take a look at Pioneer Power Solutions' company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Valuation: What is Pioneer Power Solutions 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 Pioneer Power Solutions 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 Pioneer Power Solutions’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.