When Can We Expect A Profit From NaaS Technology Inc. (NASDAQ:NAAS)?

With the business potentially at an important milestone, we thought we'd take a closer look at NaaS Technology Inc.'s (NASDAQ:NAAS) future prospects. NaaS Technology Inc. provides electric vehicle (EV) charging services in China. On 31 December 2023, the US$309m market-cap company posted a loss of CN¥1.3b for its most recent financial year. As path to profitability is the topic on NaaS Technology'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.

See our latest analysis for NaaS Technology

NaaS Technology is bordering on breakeven, according to the 2 American Specialty Retail analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of CN¥96m in 2025. So, the company is predicted to breakeven just over a year 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 116% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for NaaS Technology given that this is a high-level summary, however, take into account 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 NaaS Technology is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of NaaS Technology 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 NaaS Technology, take a look at NaaS Technology's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:

1. Valuation: What is NaaS Technology 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 NaaS Technology 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 NaaS Technology’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.