We feel now is a pretty good time to analyse Arlo Technologies, Inc.'s (NYSE:ARLO) business as it appears the company may be on the cusp of a considerable accomplishment. Arlo Technologies, Inc., together with its subsidiaries, provides a cloud-based platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions. The company's loss has recently broadened since it announced a US$22m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$25m, moving it further away from breakeven. As path to profitability is the topic on Arlo Technologies' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Arlo Technologies is bordering on breakeven, according to the 5 American Electronic analysts. They expect the company to post a final loss in 2024, before turning a profit of US$38m in 2025. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 189% year-on-year, on average, which is rather optimistic! 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 Arlo Technologies given that this is a high-level summary, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we'd like to point out is that Arlo Technologies 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 Arlo Technologies, so if you are interested in understanding the company at a deeper level, take a look at Arlo Technologies' company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Arlo Technologies 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 Arlo Technologies 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 Arlo Technologies'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.