With the business potentially at an important milestone, we thought we'd take a closer look at Ardmore Shipping Corporation's (NYSE:ASC) future prospects. Ardmore Shipping Corporation engages in the seaborne transportation of petroleum products and chemicals worldwide. The company’s loss has recently broadened since it announced a US$6.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$49m, moving it further away from breakeven. Many investors are wondering about the rate at which Ardmore Shipping 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 Ardmore Shipping

Ardmore Shipping is bordering on breakeven, according to the 7 American Oil and Gas analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$4.4m in 2022. The company is therefore projected to breakeven around 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 113% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Ardmore Shipping given that this is a high-level summary, though, take into account that by and large energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we would like to bring into light with Ardmore Shipping is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Ardmore Shipping's case is 47%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Ardmore Shipping 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 Ardmore Shipping 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 Ardmore Shipping’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.

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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.