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Arlo Technologies, Inc. (NYSE:ARLO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Arlo Technologies, Inc., together with its subsidiaries, provides a cloud-based platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions. With the latest financial year loss of US$22m and a trailing-twelve-month loss of US$25m, the US$1.1b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Arlo Technologies' 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.
View our latest analysis for Arlo Technologies
According to the 5 industry analysts covering Arlo Technologies, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$22m in 2025. The company is therefore projected to breakeven just over a year from now. 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 157%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Arlo Technologies' upcoming projects, but, 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.
Before we wrap up, there’s one aspect worth mentioning. Arlo Technologies currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Arlo Technologies to cover in one brief article, but the key fundamentals for the company can all be found in one place – Arlo Technologies' company page on Simply Wall St. We've also compiled a list of important factors you should further research:
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Valuation: What is Arlo Technologies 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 Arlo Technologies is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Arlo Technologies’s board and the CEO’s background.
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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.