Aemetis, Inc. (NASDAQ:AMTX): Are Analysts Optimistic?

With the business potentially at an important milestone, we thought we'd take a closer look at Aemetis, Inc.'s (NASDAQ:AMTX) future prospects. Aemetis, Inc. operates as a renewable natural gas and renewable fuels company. The US$132m market-cap company posted a loss in its most recent financial year of US$108m and a latest trailing-twelve-month loss of US$43m shrinking the gap between loss and breakeven. As path to profitability is the topic on Aemetis' 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.

View our latest analysis for Aemetis

Consensus from 5 of the American Oil and Gas analysts is that Aemetis is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$23m in 2025. The company is therefore projected to breakeven just over a year from today. 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 48% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Aemetis given that this is a high-level summary, though, take into account that generally an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. So, 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 issue worth mentioning. Aemetis 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:

There are key fundamentals of Aemetis 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 Aemetis, take a look at Aemetis' company page on Simply Wall St. We've also put together a list of important factors you should further examine:

1. Historical Track Record: What has Aemetis' 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 Aemetis' 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. 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.