We feel now is a pretty good time to analyse Westrock Coffee Company, LLC's (NASDAQ:WEST) business as it appears the company may be on the cusp of a considerable accomplishment. Westrock Coffee Company, LLC roasts, produces, and distributes coffee. The US$798m market-cap company posted a loss in its most recent financial year of US$46m and a latest trailing-twelve-month loss of US$46m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Westrock Coffee Company will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to some industry analysts covering Westrock Coffee Company, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$1.7m in 2022. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 104%, 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 Westrock Coffee Company's upcoming projects, however, 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.
Before we wrap up, there’s one issue worth mentioning. Westrock Coffee Company currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Westrock Coffee Company, so if you are interested in understanding the company at a deeper level, take a look at Westrock Coffee Company's company page on Simply Wall St. We've also put together a list of essential factors you should further research:
Historical Track Record: What has Westrock Coffee Company'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 Westrock Coffee Company'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.
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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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