Yahoo Finance When Will Fisker Inc. (NYSE:FSR) Become Profitable?
Fisker Inc. (NYSE:FSR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Fisker Inc. develops, manufactures, markets, leases, or sale of electric vehicles. The company’s loss has recently broadened since it announced a US$471m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$516m, moving it further away from breakeven. The most pressing concern for investors is Fisker's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Fisker
Fisker is bordering on breakeven, according to the 9 American Auto analysts. They expect the company to post a final loss in 2024, before turning a profit of US$507m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. 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 59%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Fisker's growth isn’t the focus of this broad overview, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Fisker is its debt-to-equity ratio of 112%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Fisker 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 Fisker, take a look at Fisker's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:
Valuation: What is Fisker 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 Fisker 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 Fisker’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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