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When Will Aqua Metals, Inc. (NASDAQ:AQMS) Become Profitable?

With the business potentially at an important milestone, we thought we'd take a closer look at Aqua Metals, Inc.'s (NASDAQ:AQMS) future prospects. Aqua Metals, Inc. engages in the recycling of lead primarily in the United States. The US$64m market-cap company’s loss lessened since it announced a US$18m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$16m, as it approaches breakeven. The most pressing concern for investors is Aqua Metals' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Aqua Metals

Consensus from 2 of the American Commercial Services analysts is that Aqua Metals is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$24m in 2024. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 26%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Aqua Metals' growth isn’t the focus of this broad overview, but, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

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Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 25% 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.

Next Steps:

This article is not intended to be a comprehensive analysis on Aqua Metals, so if you are interested in understanding the company at a deeper level, take a look at Aqua Metals' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:

  1. Historical Track Record: What has Aqua Metals' 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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aqua Metals' board and the CEO’s background.

  3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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