Australia markets close in 1 hour 13 minutes
  • ALL ORDS

    7,334.30
    +45.50 (+0.62%)
     
  • ASX 200

    7,074.80
    +42.30 (+0.60%)
     
  • AUD/USD

    0.7094
    -0.0030 (-0.43%)
     
  • OIL

    91.18
    -0.91 (-0.99%)
     
  • GOLD

    1,809.30
    -6.20 (-0.34%)
     
  • BTC-AUD

    35,024.82
    +169.10 (+0.49%)
     
  • CMC Crypto 200

    592.06
    +20.78 (+3.64%)
     
  • AUD/EUR

    0.6917
    -0.0023 (-0.33%)
     
  • AUD/NZD

    1.1045
    +0.0035 (+0.32%)
     
  • NZX 50

    11,789.69
    +59.17 (+0.50%)
     
  • NASDAQ

    13,565.87
    +273.87 (+2.06%)
     
  • FTSE

    7,500.89
    +34.98 (+0.47%)
     
  • Dow Jones

    33,761.05
    +424.35 (+1.27%)
     
  • DAX

    13,795.85
    +101.35 (+0.74%)
     
  • Hang Seng

    20,118.79
    -56.83 (-0.28%)
     
  • NIKKEI 225

    28,891.32
    +344.34 (+1.21%)
     

Fluence Corporation Limited (ASX:FLC) Could Be Less Than A Year Away From Profitability

  • Oops!
    Something went wrong.
    Please try again later.
·2-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

With the business potentially at an important milestone, we thought we'd take a closer look at Fluence Corporation Limited's (ASX:FLC) future prospects. Fluence Corporation Limited provides water and wastewater treatment, and reuse solutions for the municipal, commercial, and industrial markets worldwide. The AU$128m market-cap company announced a latest loss of US$8.8m on 31 December 2021 for its most recent financial year result. Many investors are wondering about the rate at which Fluence 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 Fluence

Fluence is bordering on breakeven, according to some Australian Machinery analysts. They expect the company to post a final loss in 2021, before turning a profit of US$800k in 2022. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 140% 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.

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

We're not going to go through company-specific developments for Fluence given that this is a high-level summary, though, bear in mind 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 Fluence is its debt-to-equity ratio of 198%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

  1. Historical Track Record: What has Fluence's 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 Fluence'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.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting