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. manufactures and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. The US$4.2b market-cap company posted a loss in its most recent financial year of US$59m and a latest trailing-twelve-month loss of US$52m shrinking the gap between loss and breakeven. As path to profitability is the topic on Freshpet's 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.

Check out our latest analysis for Freshpet

Freshpet is bordering on breakeven, according to the 17 American Food analysts. They expect the company to post a final loss in 2024, before turning a profit of US$7.2m in 2025. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 100% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won't go into details of Freshpet's upcoming projects, though, bear in mind that generally 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 issue worth mentioning. Freshpet currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in Freshpet's case is 42%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Freshpet which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Freshpet, take a look at Freshpet's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

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.