We feel now is a pretty good time to analyse Gogoro Inc.’s (NASDAQ:GGR) business as it appears the company may be on the cusp of a considerable accomplishment. Gogoro Inc. manufactures two-wheeled electric vehicle. The US$852m market-cap company announced a latest loss of US$99m on 31 December 2022 for its most recent financial year result. As path to profitability is the topic on Gogoro’s investors mind, we’ve decided to gauge market sentiment. We’ve put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Gogoro
Consensus from 3 of the American Auto analysts is that Gogoro is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$20m in 2025. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 55% year-on-year, on average, which signals high confidence from analysts. 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 Gogoro’s upcoming projects, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Gogoro is its debt-to-equity ratio of 143%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Gogoro, so if you are interested in understanding the company at a deeper level, take a look at Gogoro’s company page on Simply Wall St. We’ve also put together a list of essential factors you should look at:
- Historical Track Record: What has Gogoro’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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Gogoro’s board and the CEO’s background.
- 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.
Valuation is complex, but we’re helping make it simple.
Find out whether Gogoro is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.
Read More: Market Sentiment Around Loss-Making Gogoro Inc. (NASDAQ:GGR)
