Polestar Automotive Holding UK PLC (NASDAQ:PSNY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Polestar Automotive Holding UK PLC manufactures and sells premium electric vehicles. On 31 December 2022, the US$8.1b market-cap company posted a loss of US$466m for its most recent financial year. The most pressing concern for investors is Polestar Automotive Holding UK’s path to profitability – when will it break even? In this article, we will touch on the expectations for the company’s growth and when analysts expect it to become profitable.
See our latest analysis for Polestar Automotive Holding UK
The consensus from 3 of the American Auto analysts is that Polestar Automotive Holding UK is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$104m in 2025. Therefore, the company is expected to break even roughly 2 years from today. What rate will the company have to grow year-on-year in order to break even on this date? Using a line of best fit, we calculated an average annual growth rate of 47%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We’re not going to go through company-specific developments for Polestar Automotive Holding UK given that this is a high-level summary, however, take into account 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 issue worth mentioning. Polestar Automotive Holding UK currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
There are key fundamentals of Polestar Automotive Holding UK which are not covered in this article, but we must stress again that this is just a basic overview. For a more comprehensive look at Polestar Automotive Holding UK, take a look at Polestar Automotive Holding UK’s company page on Simply Wall St. We’ve also put together a list of essential aspects you should further examine:
Historical Track Records: What has Polestar Automotive Holding UK’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 Polestar Automotive Holding UK’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.
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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.
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