Stock Analysis

Loss-Making Charge Enterprises, Inc. (NASDAQ:CRGE) Expected To Breakeven In The Medium-Term

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OTCPK:CRGE.Q
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Charge Enterprises, Inc. (NASDAQ:CRGE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Charge Enterprises Inc. operates as an electrical, broadband, and electric vehicle (EV) charging infrastructure company. The US$260m market-cap company announced a latest loss of US$68m on 31 December 2022 for its most recent financial year result. Many investors are wondering about the rate at which Charge Enterprises 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 Charge Enterprises

Consensus from 2 of the American Telecom analysts is that Charge Enterprises is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$11m in 2025. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 64% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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NasdaqGM:CRGE Earnings Per Share Growth April 27th 2023

Underlying developments driving Charge Enterprises' growth isn’t the focus of this broad overview, however, 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.

Before we wrap up, there’s one issue worth mentioning. Charge Enterprises currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Charge Enterprises' case is 71%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Charge Enterprises 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 Charge Enterprises, take a look at Charge Enterprises' company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

  1. Valuation: What is Charge Enterprises 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 Charge Enterprises 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 Charge Enterprises’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.

Valuation is complex, but we're helping make it simple.

Find out whether Charge Enterprises is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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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.