Westrock Coffee Company's (NASDAQ:WEST) Shift From Loss To Profit

Westrock Coffee Company (NASDAQ:WEST) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Westrock Coffee Company, LLC operates as an integrated coffee, tea, flavors, extracts, and ingredients solutions provider in the United States and internationally. The US$740m market-cap company posted a loss in its most recent financial year of US$78m and a latest trailing-twelve-month loss of US$69m shrinking the gap between loss and breakeven. The most pressing concern for investors is Westrock Coffee's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Westrock Coffee

Westrock Coffee is bordering on breakeven, according to the 4 American Food analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$18m in 2024. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 165%, which is rather optimistic! 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 Westrock Coffee given that this is a high-level summary, but, bear in mind that generally 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. Westrock Coffee currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Westrock Coffee's case is 84%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Westrock Coffee to cover in one brief article, but the key fundamentals for the company can all be found in one place – Westrock Coffee's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Historical Track Record: What has Westrock Coffee's 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 Westrock Coffee'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. 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.