We feel now is a pretty good time to analyse ARMOUR Residential REIT, Inc.'s (NYSE:ARR) business as it appears the company may be on the cusp of a considerable accomplishment. ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. On 31 December 2024, the US$1.5b market-cap company posted a loss of US$26m for its most recent financial year. As path to profitability is the topic on ARMOUR Residential REIT's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for ARMOUR Residential REIT

According to the 3 industry analysts covering ARMOUR Residential REIT, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$312m in 2025. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 79% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving ARMOUR Residential REIT's growth isn’t the focus of this broad overview, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with ARMOUR Residential REIT is its debt-to-equity ratio of over 2x. 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 around investing in the loss-making company.

Next Steps:

There are too many aspects of ARMOUR Residential REIT to cover in one brief article, but the key fundamentals for the company can all be found in one place – ARMOUR Residential REIT's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

1. Historical Track Record: What has ARMOUR Residential REIT'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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ARMOUR Residential REIT'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.

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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.