With the business potentially at an important milestone, we thought we'd take a closer look at Electrovaya Inc.'s (TSE:ELVA) future prospects. Electrovaya Inc. engages in the design, development, manufacture, and sale of lithium-ion batteries, battery management systems, and battery-related products for energy storage, clean electric transportation, and other specialized applications in North America. The CA$93m market-cap company posted a loss in its most recent financial year of US$1.5m and a latest trailing-twelve-month loss of US$42k shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Electrovaya will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Electrovaya

Consensus from 4 of the Canadian Electrical analysts is that Electrovaya is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$16m in 2025. 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 58% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Electrovaya's growth isn’t the focus of this broad overview, however, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Electrovaya is its debt-to-equity ratio of over 2x. Typically, 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:

This article is not intended to be a comprehensive analysis on Electrovaya, so if you are interested in understanding the company at a deeper level, take a look at Electrovaya's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

1. Valuation: What is Electrovaya 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 Electrovaya 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 Electrovaya’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.

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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.