Agrify Corporation (NASDAQ:AGFY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Agrify Corporation develops precision hardware and software cultivation and extraction solutions for the cannabis and hemp industry in the United States. The US$65m market-cap company announced a latest loss of US$33m on 31 December 2021 for its most recent financial year result. As path to profitability is the topic on Agrify'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.
Agrify is bordering on breakeven, according to the 4 American Machinery analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$33m in 2024. Therefore, the company is expected to breakeven roughly 2 years from now. 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 67% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Agrify's upcoming projects, though, 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.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 0.8% 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.
There are key fundamentals of Agrify 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 Agrify, take a look at Agrify's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:
- Valuation: What is Agrify 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 Agrify is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Agrify’s board and the CEO’s background.
- 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.
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.