We feel now is a pretty good time to analyse CHAR Technologies Ltd.'s (CVE:YES) business as it appears the company may be on the cusp of a considerable accomplishment. CHAR Technologies Ltd. engages in converting woody materials and organic waste into renewable gases and biocarbon. The CA$38m market-cap company posted a loss in its most recent financial year of CA$1.1m and a latest trailing-twelve-month loss of CA$374k shrinking the gap between loss and breakeven. The most pressing concern for investors is CHAR Technologies' 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.
CHAR Technologies is bordering on breakeven, according to some Canadian Commercial Services analysts. They anticipate the company to incur a final loss in 2027, before generating positive profits of CA$10m in 2028. The company is therefore projected to breakeven around 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 83%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving CHAR Technologies' growth isn’t the focus of this broad overview, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Check out our latest analysis for CHAR Technologies
One thing we would like to bring into light with CHAR Technologies is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in CHAR Technologies' case is 48%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of CHAR Technologies to cover in one brief article, but the key fundamentals for the company can all be found in one place – CHAR Technologies' company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:
- Historical Track Record: What has CHAR Technologies' 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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CHAR Technologies' 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.
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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.