We feel now is a pretty good time to analyse Freshpet, Inc.'s (NASDAQ:FRPT) business as it appears the company may be on the cusp of a considerable accomplishment. Freshpet, Inc., together with its subsidiaries, manufactures, distributes, and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. The US$5.1b market-cap company announced a latest loss of US$34m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Freshpet's 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.

According to the 18 industry analysts covering Freshpet, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$3.6m in 2024. Therefore, the company is expected to breakeven roughly 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 55% is expected, 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, but, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there's one issue worth mentioning. Freshpet currently has a relatively high level of debt. Typically, debt shouldn't exceed 40% of your equity, which in Freshpet's case is 41%. A higher level of debt requires more stringent capital management which increases the risk in 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 put together a list of important factors you should look at:

1. Valuation: What is Freshpet 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 Freshpet 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 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.