With the business potentially at an important milestone, we thought we'd take a closer look at Aqua Metals, Inc.'s (NASDAQ:AQMS) future prospects. Aqua Metals, Inc. engages in the recycling of lead primarily in the United States. The US$201m market-cap company’s loss lessened since it announced a US$26m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$25m, as it approaches breakeven. As path to profitability is the topic on Aqua Metals' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 2 industry analysts covering Aqua Metals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$4.5m in 2023. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Aqua Metals' growth isn’t the focus of this broad overview, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 0.5% 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.
This article is not intended to be a comprehensive analysis on Aqua Metals, so if you are interested in understanding the company at a deeper level, take a look at Aqua Metals' company page on Simply Wall St. We've also compiled a list of key aspects you should look at:
- Valuation: What is Aqua Metals 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 Aqua Metals 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 Aqua Metals’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.
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This article by Simply Wall St is general in nature. 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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