Electrovaya (TSX:ELVA) Profit Turnaround Fuels Bullish Narratives Despite Near-99x P/E Valuation

Electrovaya (TSX:ELVA) just capped FY 2025 with fourth quarter revenue of about $20.5 million and basic EPS of roughly $0.05, underscoring a clean finish to a year in which trailing twelve month revenue reached about $63.8 million and EPS came in at roughly $0.09. The company has seen quarterly revenue move from about $11.6 million in Q4 2024 to $20.5 million in Q4 2025, while quarterly EPS shifted from roughly $0.00 to about $0.05 over the same stretch, pointing to a business that is now converting a higher share of sales into net income.

See our full analysis for Electrovaya.

With the latest numbers on the table, the next step is to see how this margin picture lines up with the dominant narratives around Electrovaya's growth story and profitability profile.

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TTM revenue tops $63.8 million

• Over the last twelve months, Electrovaya generated about $63.8 million in revenue and $3.4 million in net income, up from roughly $44.6 million in revenue and a $1.5 million net loss a year earlier on a trailing basis.
• Analysts' consensus view sees this shift to $3.4 million of trailing net income as the base for higher margin, more diversified growth. However, they also flag that any slowdown from forecast revenue growth of around 26% per year or delays in expansion into sectors like robotics and energy storage would make it harder to sustain these improved earnings.
  • The move from a trailing net loss of about $1.5 million to a $3.4 million profit supports the idea that higher margin battery applications and scaling production are starting to show up in the bottom line.
  • At the same time, consensus expectations for longer term revenue to reach $177.9 million and earnings of $28.9 million by around 2028 imply that the recent $63.8 million revenue base must keep compounding quickly to justify those forecasts.

EPS swings highlight profit turnaround

• On a trailing twelve month basis, basic EPS moved from about negative $0.04 to roughly positive $0.09, while quarterly EPS improved from around negative $0.01 in Q1 2025 to about $0.05 in Q4 2025.
• The bullish narrative leans on this earnings turnaround, referencing five year earnings growth of about 26.8% per year and forecasts for roughly 38% annual earnings growth. Those expectations would be challenged if newer verticals like airport ground equipment or grid storage do not scale as quickly as assumed.
  • The step up in quarterly net income from a loss of about $0.4 million in Q1 2025 to a $2.0 million profit in Q4 2025 heavily supports the bullish case that operational leverage is emerging as revenue rises.
  • However, analysts also expect earnings to climb to $28.9 million by around 2028 from $1.2 million today, which is a big jump compared with the current $3.4 million trailing profit and leaves little room for slower adoption in those new markets.

Have bulls correctly priced how quickly Electrovaya can bridge the gap from $3.4 million in trailing profits to the $28.9 million earnings analysts model, or are expectations already running ahead of the operating reality implied by recent results? 🐂 Electrovaya Bull Case

Rich valuation despite financial strain

• With the current share price at $9.56 versus a DCF fair value of about $8.11, Electrovaya trades on a trailing P/E of roughly 98.8 times, far above the North American Electrical industry average of about 31.3 times and peer average near 16.7 times.
• The bearish narrative focuses on this valuation premium and the fact that interest payments are not well covered by earnings and shareholders were substantially diluted over the past year. It argues that even strong forecasts for roughly 26% annual revenue growth and 38% annual earnings growth may not offset the risks implied by such a high multiple.
  • The gap between the $9.56 share price and the $8.11 DCF fair value challenges the view that current growth and profitability fully justify the stock's valuation, especially given the 98.8 times P/E ratio.
  • Analyst assumptions that shares outstanding will grow roughly 7% per year for the next three years also align with the concern that ongoing dilution could make it harder for per share metrics like EPS to keep pace with headline earnings growth.

If the market is already paying close to 99 times trailing earnings while dilution and weak interest coverage persist, how much upside is really left if growth stumbles even slightly from the current plan? 🐻 Electrovaya Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Electrovaya on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Electrovaya research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Explore Alternatives

Electrovaya's rich valuation, ongoing shareholder dilution, and weak interest coverage create a narrow margin for error if growth slows from optimistic forecasts.

If paying nearly 99 times trailing earnings backed by fragile financial coverage feels too risky, use our these 907 undervalued stocks based on cash flows to quickly focus on companies where the share price more closely reflects fundamentals and downside risk appears more contained.

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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