Breakeven Is Near for Arlo Technologies, Inc. (NYSE:ARLO)

We feel now is a pretty good time to analyse Arlo Technologies, Inc.'s (NYSE:ARLO) business as it appears the company may be on the cusp of a considerable accomplishment. Arlo Technologies, Inc., together with its subsidiaries, provides a cloud-based platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions. The US$1.2b market-cap company announced a latest loss of US$22m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Arlo Technologies 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.

Check out our latest analysis for Arlo Technologies

Consensus from 5 of the American Electronic analysts is that Arlo Technologies is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$16m in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 118% 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.

Given this is a high-level overview, we won’t go into details of Arlo Technologies' upcoming projects, but, 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.

One thing we’d like to point out is that Arlo Technologies has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Arlo Technologies 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 Arlo Technologies, take a look at Arlo Technologies' company page on Simply Wall St. We've also compiled a list of key factors you should further research:

1. Valuation: What is Arlo Technologies 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 Arlo Technologies 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 Arlo Technologies’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. 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.