Aqua Metals, Inc.'s (NASDAQ:AQMS): Aqua Metals, Inc. engages in the recycling of lead primarily in the United States. The company’s loss has recently broadened since it announced a -US$40.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$45.0m, moving it further away from breakeven. Many investors are wondering the rate at which AQMS will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for AQMS.
According to the 3 industry analysts covering AQMS, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$11m in 2021. AQMS is therefore projected to breakeven around 2 years from today. How fast will AQMS have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 86% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, AQMS may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of AQMS’s upcoming projects, though, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that AQMS has managed its capital judiciously, with debt making up 14% of equity. This means that AQMS has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on AQMS, so if you are interested in understanding the company at a deeper level, take a look at AQMS’s company page on Simply Wall St. I’ve also put together a list of key factors you should further research:
- Valuation: What is AQMS 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 AQMS is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aqua Metals’s board and the CEO’s back ground.
- 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.