Loop Industries, Inc. (NASDAQ:LOOP) Is Expected To Breakeven In The Near Future

With the business potentially at an important milestone, we thought we'd take a closer look at Loop Industries, Inc.'s (NASDAQ:LOOP) future prospects. Loop Industries, Inc., a technology company, focuses on depolymerizing waste polyethylene terephthalate PET plastics and polyester fibers, including plastic bottles, packaging, carpets and textiles of any color, transparency and even ocean plastics that have been degraded by the sun and salt, to its base building blocks. With the latest financial year loss of US$21m and a trailing-twelve-month loss of US$19m, the US$77m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Loop Industries' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Loop Industries

Loop Industries is bordering on breakeven, according to the 2 American Chemicals analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$17m in 2027. Therefore, the company is expected to breakeven roughly 3 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 79% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Loop Industries' upcoming projects, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Loop Industries currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Loop Industries' case is 63%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Loop Industries 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 Loop Industries, take a look at Loop Industries' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Historical Track Record: What has Loop Industries' 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 Loop Industries' 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.