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Westrock Coffee Company, LLC (NASDAQ:WEST) Has Found A Path To Profitability

Westrock Coffee Company, LLC (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 roasts, produces, and distributes coffee. The US$952m market-cap company posted a loss in its most recent financial year of US$46m and a latest trailing-twelve-month loss of US$56m leading to an even wider gap between loss and breakeven. 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

Consensus from 4 of the American Food analysts is that Westrock Coffee Company is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$16m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 106% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Westrock Coffee Company given that this is a high-level summary, though, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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Before we wrap up, there’s one issue worth mentioning. Westrock Coffee Company currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Westrock Coffee Company's case is 80%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Westrock Coffee Company to cover in one brief article, but the key fundamentals for the company can all be found in one place – Westrock Coffee Company's company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:

  1. 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.

  2. 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.

  3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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