When Will Cadiz Inc. (NASDAQ:CDZI) Breakeven?

We feel now is a pretty good time to analyse Cadiz Inc.'s (NASDAQ:CDZI) business as it appears the company may be on the cusp of a considerable accomplishment. Cadiz Inc., together with its subsidiaries, provides water solutions in the United States. The US$238m market-cap company posted a loss in its most recent financial year of US$36m and a latest trailing-twelve-month loss of US$39m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Cadiz's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Consensus from 2 of the American Water Utilities analysts is that Cadiz is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$1.0m in 2027. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 67%, which is rather optimistic! 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 Cadiz's upcoming projects, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Check out our latest analysis for Cadiz

One thing we would like to bring into light with Cadiz is its debt-to-equity ratio of 131%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Cadiz, so if you are interested in understanding the company at a deeper level, take a look at Cadiz's company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Historical Track Record: What has Cadiz's 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 Cadiz'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.