When Can We Expect A Profit From Arq, Inc. (NASDAQ:ARQ)?

With the business potentially at an important milestone, we thought we'd take a closer look at Arq, Inc.'s (NASDAQ:ARQ) future prospects. Arq, Inc. produces activated carbon products in North America. The US$233m market-cap company’s loss lessened since it announced a US$12m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$4.1m, as it approaches breakeven. The most pressing concern for investors is Arq's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Arq

Expectations from some of the American Chemicals analysts is that Arq is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$9.9m in 2025. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 79% 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.

Underlying developments driving Arq's growth isn’t the focus of this broad overview, but, bear in mind that by and large 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 9.9% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Arq 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 Arq, take a look at Arq's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

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