We feel now is a pretty good time to analyse Clean Power Hydrogen Plc's (LON:CPH2) business as it appears the company may be on the cusp of a considerable accomplishment. Clean Power Hydrogen plc, a green hydrogen technology and manufacturing company, engages in the development of hydrogen and oxygen production solutions. The UK£109m market-cap company announced a latest loss of UK£3.3m on 31 December 2021 for its most recent financial year result. As path to profitability is the topic on Clean Power Hydrogen's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Expectations from some of the British Machinery analysts is that Clean Power Hydrogen is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of UK£3.0m 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 97% is expected, which is rather optimistic! 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 Clean Power Hydrogen's upcoming projects, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Clean Power Hydrogen currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
There are key fundamentals of Clean Power Hydrogen 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 Clean Power Hydrogen, take a look at Clean Power Hydrogen's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:
Valuation: What is Clean Power Hydrogen 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 Clean Power Hydrogen 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 Clean Power Hydrogen’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.
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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.
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