Capstone Green Energy Corporation (NASDAQ:CGRN) Turns from Loss to Profit

Capstone Green Energy Corporation (NASDAQ:CGRN) may be approaching a major achievement in his company, so we’d like to shed some light on the company. Capstone Green Energy Corporation develops, manufactures, markets and services microturbine technology solutions for use in stationary distributed power generation and distribution network applications worldwide. With the last loss of $20 million in the fiscal year and a loss of $20 million in the last twelve months, the $31 million market capitalization company has mitigated its loss by approaching its target of ‘balance. Since the path to profitability is what Capstone Green Energy investors are concerned about, we decided to gauge market sentiment. We’ve put together a brief overview of industry analysts’ expectations for the company, its breakeven year and its implied growth rate.

Check opportunities and risks within the US electrical industry.

Capstone Green Energy is close to equilibrium, according to the 3 analysts at American Electrical. They expect the business to make a final loss in 2024, before making a profit of US$3.8 million in 2025. Therefore, the business is expected to break even in about 3 years. How fast will the business need to grow each year to break even by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 69% year-over-year, on average, which is pretty optimistic! If this rate turns out to be too aggressive, the company could become profitable much later than analysts predict.

We are not going to review company-specific developments for Capstone Green Energy since this is a high-level summary, but do consider that in general a high rate of growth is not unusual, particularly when a company is in a period of investment.

Before concluding, there is one issue worth mentioning. Capstone Green Energy currently has a leverage ratio above 2x. As a general rule, debt should not exceed 40% of your equity, which in this case the company has greatly exceeded. Note that higher debt increases the risk of investing in the loss-making company.

Next steps:

There are fundamentals of Capstone Green Energy that are not covered in this article, but we must re-emphasize that this is just a basic overview. For a more complete overview of Capstone Green Energy, check out Capstone Green Energy’s company page on Simply Wall St. We’ve also compiled a list of relevant aspects you should consider in more detail:

1. Historical record: How has Capstone Green Energy performed in the past? Dig deeper into the past history analysis and take a look at the free visual representations of our analysis for clarity.
2. Management team: An experienced management team at the helm boosts our confidence in the company – take a look at who sits on Capstone Green Energy’s board and the CEO’s background.
3. Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Explore our free list of these great stocks here.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.