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NEXE Innovations Inc. (CVE:NEXE): When Will It Breakeven?

·2 min read

NEXE Innovations Inc. (CVE:NEXE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. NEXE Innovations Inc. designs, develops, manufactures, and sells plant-based single-serve coffee pods for use in single-serve coffee machines. The CA$50m market-cap company posted a loss in its most recent financial year of CA$17m and a latest trailing-twelve-month loss of CA$19m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which NEXE Innovations 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.

View our latest analysis for NEXE Innovations

NEXE Innovations is bordering on breakeven, according to some Canadian Packaging analysts. They expect the company to post a final loss in 2022, before turning a profit of CA$117k in 2023. The company is therefore projected to breakeven just over a year 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 119% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of NEXE Innovations' upcoming projects, but, bear in mind that typically 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 2.8% 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:

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

  1. Historical Track Record: What has NEXE Innovations' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on NEXE Innovations' 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.

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