We feel now is a pretty good time to analyse NuEnergy Gas Limited's (ASX:NGY) business as it appears the company may be on the cusp of a considerable accomplishment. NuEnergy Gas Limited, an independent clean energy company, engages in the exploration, appraisal, and development of coal bed methane gas projects in Indonesia. The AU$59m market-cap company’s loss lessened since it announced a AU$941k loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$587k, as it approaches breakeven. Many investors are wondering about the rate at which NuEnergy Gas will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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According to some industry analysts covering NuEnergy Gas, breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of AU$1.5m in 2027. So, the company is predicted to breakeven just over a year from today. 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 113%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving NuEnergy Gas' growth isn’t the focus of this broad overview, however, take into account that by and large energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Check out our latest analysis for NuEnergy Gas

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 15% 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:

There are too many aspects of NuEnergy Gas to cover in one brief article, but the key fundamentals for the company can all be found in one place – NuEnergy Gas' company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

1. Historical Track Record: What has NuEnergy Gas' 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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on NuEnergy Gas' 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.