Loss-Making Loop Industries, Inc. (NASDAQ:LOOP) Expected To Breakeven In The Medium-Term

Loop Industries, Inc. (NASDAQ:LOOP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Loop Industries, Inc., a technology company, focuses on depolymerizing waste polyethylene terephthalate (PET) plastics and polyester fibers into its base building block monomers. The US$80m market-cap company posted a loss in its most recent financial year of US$15m and a latest trailing-twelve-month loss of US$13m shrinking the gap between loss and breakeven. The most pressing concern for investors is Loop Industries' 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.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

According to the 2 industry analysts covering Loop Industries, the consensus is that breakeven is near. They expect the company to post a final loss in 2027, before turning a profit of US$7.4m in 2028. So, the company is predicted to breakeven approximately 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2028? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, which signals high confidence from analysts. 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 Loop Industries given that this is a high-level summary, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

See our latest analysis for Loop Industries

One thing we would like to bring into light with Loop Industries 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of Loop Industries to cover in one brief article, but the key fundamentals for the company can all be found in one place – Loop Industries' company page on Simply Wall St. We've also compiled a list of important 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.

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.