When Will Marrone Bio Innovations, Inc. (NASDAQ:MBII) Turn A Profit?

We feel now is a pretty good time to analyse Marrone Bio Innovations, Inc.'s (NASDAQ:MBII) business as it appears the company may be on the cusp of a considerable accomplishment. Marrone Bio Innovations, Inc. discovers, develops, produces, and promotes biological products for pest management, plant nutrition, and plant health in the United States and internationally. With the latest financial year loss of US$37m and a trailing-twelve-month loss of US$26m, the US$191m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Marrone Bio Innovations will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Marrone Bio Innovations

Consensus from 6 of the American Chemicals analysts is that Marrone Bio Innovations is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of US$10m in 2023. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 60% 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.

Underlying developments driving Marrone Bio Innovations' growth isn’t the focus of this broad overview, 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. Marrone Bio Innovations currently has a debt-to-equity ratio of 108%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Marrone Bio Innovations 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 Marrone Bio Innovations, take a look at Marrone Bio Innovations' company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Valuation: What is Marrone Bio Innovations 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 Marrone Bio Innovations 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 Marrone Bio Innovations’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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