With the business potentially at an important milestone, we thought we'd take a closer look at Arbe Robotics Ltd.'s (NASDAQ:ARBE) future prospects. Arbe Robotics Ltd., a semiconductor company, provides 4D imaging radar solutions for tier 1 automotive suppliers and automotive manufacturers in Israel and the United States. The US$395m market-cap company’s loss lessened since it announced a US$58m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$49m, as it approaches breakeven. Many investors are wondering about the rate at which Arbe Robotics 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.
Arbe Robotics is bordering on breakeven, according to the 5 American Electronic analysts. They expect the company to post a final loss in 2023, before turning a profit of US$37m in 2024. 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 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 96% year-on-year, on average, which signals high confidence from analysts. 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 Arbe Robotics given that this is a high-level summary, though, bear in mind that by and large 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. Arbe Robotics currently has no debt on its balance sheet, which is quite unusual for a cash-burning 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 Arbe Robotics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Arbe Robotics' company page on Simply Wall St. We've also put together a list of important aspects you should further examine:
- Valuation: What is Arbe Robotics 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 Arbe Robotics 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 Arbe Robotics’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.
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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.
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