Westrock Coffee Company (NASDAQ:WEST) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Westrock Coffee Company, LLC operates as an integrated coffee, tea, flavors, extracts, and ingredients solutions provider in the United States and internationally. With the latest financial year loss of US$35m and a trailing-twelve-month loss of US$75m, the US$659m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Westrock Coffee will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Westrock Coffee
According to the 5 industry analysts covering Westrock Coffee, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$26m in 2026. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 98% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Westrock Coffee given that this is a high-level summary, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Westrock Coffee is its debt-to-equity ratio of 135%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Westrock Coffee, so if you are interested in understanding the company at a deeper level, take a look at Westrock Coffee's company page on Simply Wall St. We've also put together a list of essential factors you should look at:
Discover if Westrock Coffee might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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