With the business potentially at an important milestone, we thought we'd take a closer look at American Superconductor Corporation's (NASDAQ:AMSC) future prospects. American Superconductor Corporation, together with its subsidiaries, provides megawatt-scale power resiliency solutions worldwide. The US$906m market-cap company announced a latest loss of US$11m on 31 March 2024 for its most recent financial year result. The most pressing concern for investors is American Superconductor'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.

American Superconductor is bordering on breakeven, according to the 3 American Electrical analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$5.0m in 2026. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 99% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for American Superconductor given that this is a high-level summary, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we'd like to point out is that The company has managed its capital prudently, with debt making up 0.02% 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:

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

1. Valuation: What is American Superconductor 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 American Superconductor 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 American Superconductor'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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com