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

Aemetis, Inc. (NASDAQ:AMTX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Aemetis, Inc. operates as a renewable natural gas and renewable fuels company. The US$158m market-cap company posted a loss in its most recent financial year of US$46m and a latest trailing-twelve-month loss of US$48m leading to an even wider gap between loss and 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.

Check out our latest analysis for Aemetis

According to the 6 industry analysts covering Aemetis, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$56m in 2026. So, the company is predicted to breakeven approximately 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 60% 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, however, take into account that generally energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

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. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on Aemetis, so if you are interested in understanding the company at a deeper level, take a look at Aemetis' company page on Simply Wall St. We've also put together a list of key aspects you should look at:

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.

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

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.