With the business potentially at an important milestone, we thought we'd take a closer look at Provaris Energy Ltd's (ASX:PV1) future prospects. Provaris Energy Ltd engages in the development of hydrogen production and export projects in Australia and internationally. The AU$8.3m market-cap company posted a loss in its most recent financial year of AU$6.1m and a latest trailing-twelve-month loss of AU$3.7m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Provaris Energy will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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Provaris Energy is bordering on breakeven, according to some Australian Oil and Gas analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of AU$8.0m in 2027. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Provaris 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

See our latest analysis for Provaris Energy

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 19% 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 Provaris Energy to cover in one brief article, but the key fundamentals for the company can all be found in one place – Provaris Energy's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:

1. Historical Track Record: What has Provaris 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 Provaris 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.