Arbe Robotics Ltd.'s (NASDAQ:ARBE) Shift From Loss To Profit

Arbe Robotics Ltd. (NASDAQ:ARBE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Arbe Robotics Ltd. provides 4D imaging radar solutions in Israel and the United States. The US$606m market-cap company announced a latest loss of US$16m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Arbe Robotics' 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.

See our latest analysis for Arbe Robotics

According to the 5 industry analysts covering Arbe Robotics, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$8.7m in 2023. So, the company is predicted to breakeven approximately 2 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 Arbe Robotics' upcoming projects, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Arbe Robotics is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on Arbe Robotics, so if you are interested in understanding the company at a deeper level, take a look at Arbe Robotics' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

1. Valuation: What is Arbe Robotics 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 Arbe Robotics 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 Arbe Robotics’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.

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.

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