When Will Aemetis, Inc. (NASDAQ:AMTX) Breakeven?

We feel now is a pretty good time to analyse Aemetis, Inc.'s (NASDAQ:AMTX) business as it appears the company may be on the cusp of a considerable accomplishment. Aemetis, Inc. operates as a renewable fuels and bio-chemicals company in North America and India. The US$96m market-cap company’s loss lessened since it announced a US$36m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$29m, as it approaches breakeven. The most pressing concern for investors is Aemetis' path to profitability – when will it 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

Aemetis is bordering on breakeven, according to the 2 American Oil and Gas analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$2.1m in 2022. The company is therefore projected 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 62% year-on-year, on average, 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, but, keep in mind that typically 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.

One thing we would like to bring into light with Aemetis is it 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 compiled a list of key aspects you should further examine:

1. Valuation: What is Aemetis 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 Aemetis is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aemetis’s 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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