Yahoo Movies Vertex Energy, Inc. (NASDAQ:VTNR): Is Breakeven Near?
We feel now is a pretty good time to analyse Vertex Energy, Inc.'s (NASDAQ:VTNR) business as it appears the company may be on the cusp of a considerable accomplishment. Vertex Energy, Inc., an environmental services company, provides a range of services designed to aggregate, process, and recycle industrial and commercial waste systems in the Gulf Coast and Central Midwest regions of the United States. The US$371m market-cap company posted a loss in its most recent financial year of US$31m and a latest trailing-twelve-month loss of US$29m shrinking the gap between loss and breakeven. The most pressing concern for investors is Vertex Energy's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Vertex Energy
Vertex Energy is bordering on breakeven, according to the 3 American Oil and Gas analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$34m in 2022. Therefore, the company is expected to breakeven just over a year 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 121%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Vertex Energy's growth isn’t the focus of this broad overview, but, take into account that by and large energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. So, 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 9.9% 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 Vertex Energy, so if you are interested in understanding the company at a deeper level, take a look at Vertex Energy's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:
Valuation: What is Vertex Energy 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 Vertex Energy 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 Vertex Energy’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.
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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