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Lotus Technology Inc. (NASDAQ:LOT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Lotus Technology Inc. engages in the design, development, and sale of battery electric lifestyle vehicles worldwide. The US$868m market-cap company announced a latest loss of US$1.1b on 31 December 2024 for its most recent financial year result. The most pressing concern for investors is Lotus Technology's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to some industry analysts covering Lotus Technology, breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of US$62m in 2027. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 78%, which is rather optimistic! 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 Lotus Technology given that this is a high-level summary, but, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
View our latest analysis for Lotus Technology
Before we wrap up, there’s one issue worth mentioning. Lotus Technology 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.
Next Steps:
This article is not intended to be a comprehensive analysis on Lotus Technology, so if you are interested in understanding the company at a deeper level, take a look at Lotus Technology's company page on Simply Wall St. We've also put together a list of key factors you should further research:
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Historical Track Record: What has Lotus Technology'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.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lotus Technology's board and the CEO’s background.
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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.