Aemetis, Inc. (NASDAQ:AMTX) Is Expected To Breakeven In The Near Future
We feel now is a pretty good time to analyse Aemetis, Inc.'s (NASDAQ:AMTX) business as it appears the company may be on the cusp of a considerable accomplishment. Aemetis, Inc. operates as a renewable natural gas and renewable fuels company in North America and India. The company’s loss has recently broadened since it announced a US$47m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$86m, moving it further away from breakeven. The most pressing concern for investors is Aemetis' 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 Aemetis
According to the 5 industry analysts covering Aemetis, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$13m in 2024. The company is therefore projected to breakeven just over a year from today. 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 62%, 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 Aemetis' upcoming projects, but, keep in mind that by and large an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. So, 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 Aemetis is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. 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 Aemetis, so if you are interested in understanding the company at a deeper level, take a look at Aemetis' company page on Simply Wall St. We've also put together a list of important factors you should look at:
Historical Track Record: What has Aemetis' 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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aemetis' board and the CEO’s background.
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.
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