Aemetis, Inc.'s (NASDAQ:AMTX) Shift From Loss To Profit

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. With the latest financial year loss of US$46m and a trailing-twelve-month loss of US$44m, the US$144m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Aemetis 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.

View our latest analysis for Aemetis

Aemetis is bordering on breakeven, according to the 6 American Oil and Gas analysts. They expect the company to post a final loss in 2025, before turning a profit of US$62m in 2026. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 54% 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.

We're not going to go through company-specific developments for Aemetis given that this is a high-level summary, though, bear in mind that by and large energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Aemetis is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. 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 pertinent aspects you should further research:

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com