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When Can We Expect A Profit From Clean Power Hydrogen Plc (LON:CPH2)?

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. On 31 December 2022, the UK£64m market-cap company posted a loss of UK£3.4m for its most recent financial year. As path to profitability is the topic on Clean Power Hydrogen's investors mind, we've decided to gauge market sentiment. 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 Clean Power Hydrogen

Consensus from 2 of the British Machinery analysts is that Clean Power Hydrogen is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of UK£2.3m in 2024. So, the company is predicted to breakeven just over a year 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 77%, which signals high confidence from analysts. 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

We're not going to go through company-specific developments for Clean Power Hydrogen given that this is a high-level summary, however, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

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One thing we’d like to point out is that Clean Power Hydrogen has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Clean Power Hydrogen to cover in one brief article, but the key fundamentals for the company can all be found in one place – Clean Power Hydrogen's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

  1. 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.

  2. 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.

  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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