We feel now is a pretty good time to analyse NeoVolta Inc.'s (NASDAQ:NEOV) business as it appears the company may be on the cusp of a considerable accomplishment. NeoVolta Inc. designs, manufactures, and sells energy storage systems in the United States. With the latest financial year loss of US$2.3m and a trailing-twelve-month loss of US$4.1m, the US$104m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which NeoVolta will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

NeoVolta is bordering on breakeven, according to some American Electrical analysts. They expect the company to post a final loss in 2026, before turning a profit of US$400k in 2027. Therefore, the company is expected to breakeven roughly 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 98%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving NeoVolta's growth isn’t the focus of this broad overview, though, take into account that generally 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 issue worth mentioning. NeoVolta currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in NeoVolta's case is 47%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on NeoVolta, so if you are interested in understanding the company at a deeper level, take a look at NeoVolta's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

1. Historical Track Record: What has NeoVolta'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 NeoVolta'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.

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.