With the business potentially at an important milestone, we thought we'd take a closer look at ATRenew Inc.'s (NYSE:RERE) future prospects. ATRenew Inc., through its subsidiaries, operates pre-owned consumer electronics transactions and services platform in the People’s Republic of China. The US$555m market-cap company’s loss lessened since it announced a CN¥156m loss in the full financial year, compared to the latest trailing-twelve-month loss of CN¥145m, as it approaches breakeven. As path to profitability is the topic on ATRenew's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for ATRenew

According to some industry analysts covering ATRenew, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of CN¥193m in 2025. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 162% year-on-year, on average, 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.

Underlying developments driving ATRenew's growth isn’t the focus of this broad overview, though, keep in mind that typically 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 13% 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 ATRenew, so if you are interested in understanding the company at a deeper level, take a look at ATRenew's company page on Simply Wall St. We've also put together a list of essential factors you should further research:

1. 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.
2. 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.
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.