We Might See A Profit From Expion360 Inc. (NASDAQ:XPON) Soon

Simply Wall St
·3 min read
4

We feel now is a pretty good time to analyse Expion360 Inc.'s (NASDAQ:XPON) business as it appears the company may be on the cusp of a considerable accomplishment. Expion360 Inc. designs, assembles, manufactures, and sells lithium iron phosphate batteries and supporting accessories under the VPR 4EVER name for recreational vehicles, marine, golf, industrial, residential, and off-the-grid applications. The US$15m market-cap company posted a loss in its most recent financial year of US$4.7m and a latest trailing-twelve-month loss of US$5.2m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Expion360's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Expion360

Expectations from some of the American Electrical analysts is that Expion360 is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$2.1m in 2022. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 144% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Expion360's upcoming projects, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Expion360 is its debt-to-equity ratio of 161%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Expion360 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 Expion360, take a look at Expion360's company page on Simply Wall St. We've also put together a list of key factors you should further research:

  1. Valuation: What is Expion360 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 Expion360 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 Expion360’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.