When Will Cadiz Inc. (NASDAQ:CDZI) Breakeven?
With the business potentially at an important milestone, we thought we'd take a closer look at Cadiz Inc.'s (NASDAQ:CDZI) future prospects. Cadiz Inc., together with its subsidiaries, operates as a natural resources development company in the United States. The US$100m market-cap company announced a latest loss of US$34m on 31 December 2021 for its most recent financial year result. As path to profitability is the topic on Cadiz's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Cadiz
According to some industry analysts covering Cadiz, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$36m in 2024. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 77% 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.
Given this is a high-level overview, we won’t go into details of Cadiz's upcoming projects, though, take into account that typically 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. Cadiz currently has a debt-to-equity ratio of 115%. Generally, the rule of thumb is 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.
Next Steps:
There are too many aspects of Cadiz to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cadiz's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:
Valuation: What is Cadiz 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 Cadiz 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 Cadiz’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.
