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With the business potentially at an important milestone, we thought we'd take a closer look at ATRenew Inc.'s (NYSE:RERE) future prospects. AiHuiShou International Co. Ltd., through its subsidiaries, operates pre-owned consumer electronics transactions and services platform under the ATRenew brand name in the People’s Republic of China. With the latest financial year loss of CN¥1.8b and a trailing-twelve-month loss of CN¥1.9b, the US$1.8b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is ATRenew's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
ATRenew is bordering on breakeven, according to the 4 American Online Retail analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of CN¥673m in 2023. The company is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 104% is expected, which is extremely buoyant. 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 ATRenew's upcoming projects, but, take into account 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 The company has managed its capital judiciously, with debt making up 3.5% 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.
There are too many aspects of ATRenew to cover in one brief article, but the key fundamentals for the company can all be found in one place – ATRenew's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:
Valuation: What is ATRenew 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 ATRenew 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 ATRenew’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. 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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