With the business potentially at an important milestone, we thought we’d take a closer look at Westrock Coffee Company, LLC’s (NASDAQ:WEST) future prospects. Westrock Coffee Company, LLC roasts, produces, and distributes coffee. With the latest financial year loss of US$46m and a trailing-twelve-month loss of US$56m, the US$953m 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 Company will turn a profit, with the big question being “when will the company breakeven?” We’ve put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Westrock Coffee Company
According to the 4 industry analysts covering Westrock Coffee Company, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$16m in 2023. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 106% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Westrock Coffee Company’s upcoming projects, 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 would like to bring into light with Westrock Coffee Company is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Westrock Coffee Company’s case is 80%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are key fundamentals of Westrock Coffee Company which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Westrock Coffee Company, take a look at Westrock Coffee Company’s company page on Simply Wall St. We’ve also put together a list of essential factors you should further research:
- Valuation: What is Westrock Coffee Company 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 Westrock Coffee Company 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 Westrock Coffee Company’s board and the CEO’s background.
- 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.
What are the risks and opportunities for Westrock Coffee Company?
Trading at 61.4% below our estimate of its fair value
Earnings are forecast to grow 106.17% per year
Revenue grew by 25.6% over the past year
Shareholders have been substantially diluted in the past year
View all Risks and Rewards
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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.