We feel now is a pretty good time to analyse REE Automotive Ltd.'s (NASDAQ:REE) business as it appears the company may be on the cusp of a considerable accomplishment. REE Automotive Ltd. operates as an automotive technology company in France, the United Kingdom, the United States, and internationally. The US$151m market-cap company posted a loss in its most recent financial year of US$114m and a latest trailing-twelve-month loss of US$110m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which REE Automotive will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for REE Automotive

According to the 2 industry analysts covering REE Automotive, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$6.0m in 2027. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqCM:REE Earnings Per Share Growth February 11th 2025

We're not going to go through company-specific developments for REE Automotive given that this is a high-level summary, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with REE Automotive is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in REE Automotive's case is 43%. 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 REE Automotive, so if you are interested in understanding the company at a deeper level, take a look at REE Automotive's company page on Simply Wall St. We've also put together a list of important aspects you should further examine:

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.