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$1.0b market-cap company posted a loss in its most recent financial year of US$11m and a latest trailing-twelve-month loss of US$865k shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which American Superconductor 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.

View our latest analysis for American Superconductor

According to the 3 industry analysts covering American Superconductor, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$4.4m in 2025. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 91% year-on-year, on average, which is rather optimistic! 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 American Superconductor's upcoming projects, but, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. American Superconductor currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect 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 important factors 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.