Aqua Metals, Inc. (NASDAQ:AQMS): Are Analysts Optimistic?

Aqua Metals, Inc. (NASDAQ:AQMS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Aqua Metals, Inc. engages in the recycling of lead primarily in the United States. With the latest financial year loss of US$45m and a trailing-twelve-month loss of US$22m, the US$296m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Aqua Metals' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Aqua Metals

Expectations from some of the American Commercial Services analysts is that Aqua Metals is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$4.5m in 2022. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 83% 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.

Given this is a high-level overview, we won’t go into details of Aqua Metals' upcoming projects, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 21% 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 Aqua Metals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Aqua Metals' company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Historical Track Record: What has Aqua Metals' 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 Aqua Metals' 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.

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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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