ATRenew Inc. (NYSE:RERE): Are Analysts Optimistic?

With the business potentially at an important milestone, we thought we'd take a closer look at ATRenew Inc.'s (NYSE:RERE) future prospects. ATRenew Inc., through its subsidiaries, operates pre-owned consumer electronics transactions and services platform in the People’s Republic of China. The US$481m market-cap company posted a loss in its most recent financial year of CN¥156m and a latest trailing-twelve-month loss of CN¥145m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which ATRenew will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for ATRenew

Expectations from some of the American Specialty Retail analysts is that ATRenew is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of CN¥193m in 2025. The company is therefore projected to breakeven just over a year from today. 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 162% is expected, which signals high confidence from analysts. 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 ATRenew given that this is a high-level summary, though, keep 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 13% 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 too many aspects of ATRenew to cover in one brief article, but the key fundamentals for the company can all be found in one place – ATRenew's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

1. Valuation: What is ATRenew 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 ATRenew 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 ATRenew’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.

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.