Yahoo Finance Clean Power Hydrogen Plc (LON:CPH2): Are Analysts Optimistic?
With the business potentially at an important milestone, we thought we'd take a closer look at Clean Power Hydrogen Plc's (LON:CPH2) future prospects. Clean Power Hydrogen plc, a green hydrogen technology and manufacturing company, engages in the development of hydrogen and oxygen production solutions. The UK£82m market-cap company posted a loss in its most recent financial year of UK£3.3m and a latest trailing-twelve-month loss of UK£2.3m shrinking the gap between loss and breakeven. The most pressing concern for investors is Clean Power Hydrogen's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Clean Power Hydrogen
According to some industry analysts covering Clean Power Hydrogen, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of UK£2.3m in 2024. The company is therefore projected to breakeven around 2 years 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 97%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Clean Power Hydrogen's upcoming projects, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. Clean Power Hydrogen currently has no debt on its balance sheet, which is quite unusual for a cash-burning 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 key fundamentals of Clean Power Hydrogen 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 Clean Power Hydrogen, take a look at Clean Power Hydrogen's company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:
Historical Track Record: What has Clean Power Hydrogen'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.
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.
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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