AMMO, Inc.'s (NASDAQ:POWW) Path To Profitability
With the business potentially at an important milestone, we thought we'd take a closer look at AMMO, Inc.'s (NASDAQ:POWW) future prospects. Ammo, Inc. designs, develops, manufactures, markets, and sells ammunition and ammunition component products for use in handguns and long guns in the United States and internationally. With the latest financial year loss of US$15m and a trailing-twelve-month loss of US$12m, the US$594m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which AMMO 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.
Check out our latest analysis for AMMO
According to the 2 industry analysts covering AMMO, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$37m in 2022. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 113% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving AMMO's growth isn’t the focus of this broad overview, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 30% 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 key fundamentals of AMMO 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 AMMO, take a look at AMMO's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:
Historical Track Record: What has AMMO'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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on AMMO's 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.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
