When Can We Expect A Profit From EHang Holdings Limited (NASDAQ:EH)?

EHang Holdings Limited (NASDAQ:EH) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. EHang Holdings Limited operates as an urban air mobility (UAM) technology platform company in the People’s Republic of China, East Asia, West Asia, North America, South America, West Africa, and Europe. The company’s loss has recently broadened since it announced a CN¥230m loss in the full financial year, compared to the latest trailing-twelve-month loss of CN¥245m, moving it further away from breakeven. As path to profitability is the topic on EHang Holdings' 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.

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Consensus from 12 of the American Aerospace & Defense analysts is that EHang Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of CN¥94m in 2026. So, the company is predicted to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 64% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving EHang Holdings' growth isn’t the focus of this broad overview, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

See our latest analysis for EHang Holdings

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 18% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on EHang Holdings, so if you are interested in understanding the company at a deeper level, take a look at EHang Holdings' company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

1. Valuation: What is EHang Holdings 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 EHang Holdings 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 EHang Holdings’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.