We feel now is a pretty good time to analyse EnWave Corporation's (CVE:ENW) business as it appears the company may be on the cusp of a considerable accomplishment. EnWave Corporation designs, constructs, markets, licenses, installs, and sells vacuum-microwave machinery for the food, cannabis, and biomaterial dehydration industries in Canada and the United States. The company’s loss has recently broadened since it announced a CA$4.1m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$5.8m, moving it further away from breakeven. As path to profitability is the topic on EnWave's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 3 industry analysts covering EnWave, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of CA$3.1m in 2024. 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 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 91% 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.
Given this is a high-level overview, we won’t go into details of EnWave's upcoming projects, but, 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.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 1.1% 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.
There are too many aspects of EnWave to cover in one brief article, but the key fundamentals for the company can all be found in one place – EnWave's company page on Simply Wall St. We've also put together a list of important aspects you should further research:
Valuation: What is EnWave 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 EnWave is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on EnWave’s board and the CEO’s background.
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.
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