With the business potentially at an important milestone, we thought we'd take a closer look at Freshpet, Inc.'s (NASDAQ:FRPT) future prospects. Freshpet, Inc. manufactures and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and the United Kingdom. The company’s loss has recently broadened since it announced a US$3.2m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$24m, moving it further away from breakeven. Many investors are wondering about the rate at which Freshpet 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.

See our latest analysis for Freshpet

Consensus from 15 of the American Food analysts is that Freshpet is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$19m in 2023. So, the company is predicted 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 75%, which is extremely buoyant. 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 Freshpet given that this is a high-level summary, though, keep in mind that typically 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. Freshpet currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of 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:

This article is not intended to be a comprehensive analysis on Freshpet, so if you are interested in understanding the company at a deeper level, take a look at Freshpet's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Historical Track Record: What has Freshpet's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Freshpet'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.