We feel now is a pretty good time to analyse Cadiz Inc.'s (NASDAQ:CDZI) business as it appears the company may be on the cusp of a considerable accomplishment. Cadiz Inc., together with its subsidiaries, provides water solutions in the United States. The US$446m market-cap company posted a loss in its most recent financial year of US$36m and a latest trailing-twelve-month loss of US$38m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Cadiz's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

According to the 2 industry analysts covering Cadiz, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2027, before generating positive profits of US$45m in 2028. Therefore, the company is expected to breakeven roughly 2 years 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 58% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Cadiz's growth isn’t the focus of this broad overview, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Cadiz is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Cadiz'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 Cadiz'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.

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.