Loss-Making Aqua Metals Inc (NASDAQ:AQMS) Expected To Breakeven
Aqua Metals Inc’s (NASDAQ:AQMS): Aqua Metals, Inc. engages in the recycling of lead primarily in the United States. On 31 December 2017, the US$89.81M market-cap posted a loss of -US$26.58M for its most recent financial year. The most pressing concern for investors is AQMS’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for AQMS.
View our latest analysis for Aqua Metals
According to the industry analysts covering AQMS, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$26.46M in 2021. AQMS is therefore projected to breakeven around 3 years from now. 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 64.33% 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.
I’m not going to go through company-specific developments for AQMS given that this is a high-level summary, but, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. AQMS has managed its capital prudently, with debt making up 17.94% 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.
Next Steps:
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 important factors you should further examine:
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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
