EVE Investments Limited (ASX:EVE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. EVE Investments Limited is a venture capital firm specializing in seed and startup investments. With the latest financial year loss of AU$2.4m and a trailing-twelve-month loss of AU$2.1m, the AU$19m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which EVE Investments 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.
Expectations from some of the Australian Food analysts is that EVE Investments is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$212k in 2022. So, the company is predicted 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 120% is expected, which is extremely buoyant. 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 EVE Investments given that this is a high-level summary, however, keep in mind that by and large 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. The company has managed its capital prudently, with debt making up 4.2% 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.
There are too many aspects of EVE Investments to cover in one brief article, but the key fundamentals for the company can all be found in one place – EVE Investments' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:
Historical Track Record: What has EVE Investments' 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 EVE Investments' 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.
This article by Simply Wall St is general in nature. 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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