Blue Energy Limited (ASX:BLU) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Blue Energy Limited, an energy company, engages in the exploration, evaluation, and development of conventional and unconventional oil and gas resources primarily in Queensland and the Northern Territory, Australia. The AU$13m market-cap company announced a latest loss of AU$14m on 30 June 2024 for its most recent financial year result. Many investors are wondering about the rate at which Blue 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.

See our latest analysis for Blue Energy

According to some industry analysts covering Blue Energy, breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of AU$1.4m in 2027. Therefore, the company is expected to breakeven roughly 2 years from today. 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 110% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Blue Energy's upcoming projects, but, bear in mind that typically an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.05% 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 Blue Energy, so if you are interested in understanding the company at a deeper level, take a look at Blue Energy's company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Historical Track Record: What has Blue 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 Blue 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.