With the business potentially at an important milestone, we thought we'd take a closer look at ADS-TEC Energy PLC's (NASDAQ:ADSE) future prospects. ADS-TEC Energy PLC engages in the provision of intelligent and decentralized energy storage systems in Europe and North America. On 31 December 2023, the US$575m market-cap company posted a loss of €55m for its most recent financial year. Many investors are wondering about the rate at which ADS-TEC Energy will turn a profit, with the big question being "when will the company breakeven?" In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

According to the 3 industry analysts covering ADS-TEC Energy, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of €4.5m in 2025. The company is therefore projected to breakeven just over a year from now. 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 111% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for ADS-TEC Energy given that this is a high-level summary, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with ADS-TEC Energy is its relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in ADS-TEC Energy's case is 41%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of ADS-TEC Energy 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 ADS-TEC Energy, take a look at ADS-TEC Energy's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

1. Historical Track Record: What has ADS-TEC Energy'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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ADS-TEC Energy'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