Nordex SE (ETR:NDX1) Has Found A Path To Profitability

Nordex SE (ETR:NDX1) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Nordex SE, together with its subsidiaries, develops, manufactures, and distributes multi-megawatt onshore wind turbines worldwide. The €3.4b market-cap company announced a latest loss of €303m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Nordex's investors mind, we've decided to gauge market sentiment. 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 Nordex

Consensus from 10 of the German Electrical analysts is that Nordex is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of €7.8m in 2024. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 89%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Nordex's upcoming projects, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 31% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Nordex to cover in one brief article, but the key fundamentals for the company can all be found in one place – Nordex's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Valuation: What is Nordex 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 Nordex 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 Nordex’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.