Breaking Down Aqua Metals, Inc. (AQMS) Financial Health: Key Insights for Investors

Are you looking for a deep dive into the financial stability of a pioneering battery recycling company? What insights can be gleaned from 2024's financial results, especially considering their advancements in lithium recovery? Did you know Aqua Metals raised approximately $15 million in equity with insider participation and received a $2.2 million tax abatement from the State of Nevada in 2024? Keep reading to explore the key indicators of Aqua Metals' financial health and understand what they mean for investors.

Aqua Metals, Inc. (AQMS) Revenue Analysis

Aqua Metals, Inc. is a company focused on recycling lithium-ion batteries. Understanding their revenue streams involves looking at their activities in recovering valuable materials from spent batteries and their strategic moves within the recycling market. Here's a breakdown of what shapes their financial picture:

As of the fiscal year 2024, Aqua Metals, Inc. has been navigating a transformative phase, intensifying its focus on commercializing its AquaRefining™ technology and securing strategic partnerships to bolster its market presence in lithium-ion battery recycling. The company's revenue streams are intricately linked to its capacity to process and refine battery materials, making technological advancements and strategic collaborations key drivers of financial performance.

Here’s a look at Aqua Metals, Inc.'s revenue dynamics:

• Primary Revenue Sources: Aqua Metals generates revenue primarily through the sale of recovered metals, such as lithium, nickel, cobalt, and manganese, extracted from recycled lithium-ion batteries. Additionally, they may derive income from technology licensing, partnerships, and joint ventures related to their AquaRefining™ process.
• Year-over-Year Revenue Growth: Analyzing Aqua Metals' revenue trends requires a close look at their annual reports and investor updates. The growth rate is significantly influenced by factors such as the volume of batteries processed, the efficiency of their refining technology, and the market prices of the recovered metals. Investors should look for consistent growth patterns and consider the impact of any operational expansions or technological improvements.
• Contribution of Business Segments: The company's business activities are centered around recycling lithium-ion batteries. Revenue contribution hinges on the volume of recycled materials and the efficiency of the recycling process.
• Significant Changes in Revenue Streams: Recent strategic shifts and technological advancements have reshaped Aqua Metals' revenue streams. The company's emphasis on partnerships and licensing agreements suggests a move towards diversifying revenue beyond direct material sales.

To provide a clearer picture, here’s a hypothetical table illustrating potential revenue streams and their contributions (Note: This is an example and not actual data):

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Aqua Metals, Inc. (AQMS) Profitability Metrics

Analyzing Aqua Metals, Inc. (AQMS)'s profitability involves examining several key metrics that reveal the company's efficiency in generating profits from its revenue and assets. These metrics include gross profit, operating profit, and net profit margins.

As of December 2024, Aqua Metals's profitability metrics present a challenging picture:

• Gross Margin: 0.00% as of December 2024. For the fiscal year ending December 31, 2023, the gross margin was reported at -25028.00%. Historically, Aqua Metals's gross margin has fluctuated significantly, with a 5-year average growth rate of 0.00% per year.
• Operating Margin: The operating margin is 0.00% as of December 2024.
• Net Profit Margin: 0.00% as of December 2024. For the fiscal year ending December 31, 2024, a net loss of $24.56 million was reported.

The trends in profitability over time highlight the difficulties Aqua Metals has faced in achieving positive margins. The company's gross profit has seen considerable variation. For example, the gross profit for the twelve months is -$8.164 million. The company's profitability rank is 1, indicating it has had trouble making a profit.

Comparing Aqua Metals's profitability ratios with industry averages reveals significant disparities. The technology represents a next-generation recycling approach designed to eliminate the production of sodium sulfate, a costly byproduct of traditional recycling methods. Unlike other processes that require extensive chemical usage and lead to significant byproduct handling and disposal costs, AquaRefining™ is designed to reduce both expenses and environmental impact.

Several factors influence Aqua Metals's operational efficiency:

• Cost Management: The cost of goods and services sold was $7.213 million for the year 2024.
• Gross Margin Trends: The gross margin has shown considerable fluctuation. In the most recent quarter (December 2024), the Gross Margin % was 0.00%.

To provide a clearer picture, here's a summary of Aqua Metals's financial performance:

For more detailed insights, you can refer to Breaking Down Aqua Metals, Inc. (AQMS) Financial Health: Key Insights for Investors.

Aqua Metals, Inc. (AQMS) Debt vs. Equity Structure

Aqua Metals, Inc. (AQMS) navigates the financial landscape by strategically employing both debt and equity to fuel its operational activities and expansion initiatives. Understanding the nuances of its debt and equity structure is crucial for investors assessing the company's financial health and risk profile. Here’s a breakdown of key aspects of Aqua Metals, Inc.'s (AQMS) approach to financing.

As of the fiscal year 2024, Aqua Metals, Inc.'s (AQMS) debt composition includes both short-term and long-term obligations. While specific figures fluctuate, it's important to monitor these levels in conjunction with the company's assets and overall financial strategy. Long-term debt is used to finance significant capital investments and strategic projects, whereas short-term debt covers immediate operational needs. Keeping tabs on these figures provides insights into the company's liquidity and solvency.

The debt-to-equity ratio is a critical metric for evaluating Aqua Metals, Inc.'s (AQMS) financial leverage. This ratio indicates the proportion of debt the company uses to finance its assets relative to the value of shareholders' equity. A high ratio suggests a more aggressive financing strategy, potentially increasing financial risk, while a lower ratio indicates a more conservative approach. Comparing Aqua Metals, Inc.'s (AQMS) ratio to industry averages offers a benchmark for assessing whether the company's leverage is sustainable and aligned with its growth strategy.

Recent financial activities, such as new debt issuances, credit rating adjustments, or refinancing efforts, significantly impact Aqua Metals, Inc.'s (AQMS) capital structure. These actions can alter the company's interest expenses, repayment schedules, and overall financial flexibility. For instance, securing a favorable credit rating can lower borrowing costs, while strategic refinancing can extend debt maturities, providing Aqua Metals, Inc. (AQMS) with more runway to execute its business plan.

Aqua Metals, Inc. (AQMS) actively balances debt financing with equity funding to maintain a healthy capital structure. Equity offerings dilute existing shareholders' ownership but can provide a stable source of capital without the obligation of repayment. The company's strategy in combining debt and equity reflects its approach to managing financial risk and supporting long-term growth objectives. Investors should consider how these choices align with the company's strategic goals and market conditions.

Here's an example of how debt and equity can interplay:

• Funding Growth: Aqua Metals, Inc. (AQMS) might issue new shares (equity) to fund research and development, reducing reliance on debt and preserving financial flexibility.
• Managing Liquidity: Short-term debt facilities, like lines of credit, can be used to manage working capital needs, ensuring smooth operations without diluting equity.
• Strategic Investments: Long-term debt can finance the construction of new facilities or the acquisition of key technologies, enhancing the company's capabilities and market position.

A detailed look at Aqua Metals, Inc.’s (AQMS) balance sheet and cash flow statements provides a clearer picture of its debt management and equity strategies. Monitoring these financial statements regularly is essential for making informed investment decisions.

Here’s a hypothetical snapshot of Aqua Metals, Inc.'s (AQMS) Debt and Equity Metrics for illustrative purposes:

Understanding these elements helps stakeholders evaluate Aqua Metals, Inc.'s (AQMS) financial resilience and strategic financial management. For further insights, check out: Breaking Down Aqua Metals, Inc. (AQMS) Financial Health: Key Insights for Investors

Aqua Metals, Inc. (AQMS) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Aqua Metals, Inc. (AQMS), analyzing these metrics provides insights into its operational efficiency and financial stability.

Assessing Aqua Metals, Inc.'s Liquidity:

The current and quick ratios are essential tools for evaluating a company's liquidity position. These ratios measure a company's ability to cover its short-term liabilities with its short-term assets.

• Current Ratio: The current ratio is calculated by dividing current assets by current liabilities. A higher current ratio generally indicates greater liquidity.
• Quick Ratio: The quick ratio, also known as the acid-test ratio, excludes inventories from current assets to provide a more conservative measure of liquidity. It is calculated as (Current Assets - Inventory) / Current Liabilities.

Analysis of working capital trends is also crucial. Working capital, which is the difference between a company's current assets and current liabilities, indicates its ability to finance its short-term operations. Monitoring the trends in working capital can reveal whether a company is efficiently managing its resources.

The cash flow statement provides a comprehensive view of a company's cash inflows and outflows, categorized into operating, investing, and financing activities.

• Operating Cash Flow: Cash generated from the company's core business activities.
• Investing Cash Flow: Cash used for investments in assets, such as property, plant, and equipment.
• Financing Cash Flow: Cash from financing activities, such as borrowing or issuing equity.

Examining these cash flow trends helps to understand how Aqua Metals, Inc. (AQMS) is managing its cash resources and whether it is generating sufficient cash to fund its operations and investments.

Potential Liquidity Concerns or Strengths

Based on the latest financial data, Aqua Metals, Inc. (AQMS) reported the following:

• For the fiscal year 2024, Aqua Metals, Inc. (AQMS) had a cash and cash equivalents balance of $4.3 million.
• The company's working capital was a deficit of $2.7 million.
• Aqua Metals, Inc. (AQMS) reported a net loss of $16.7 million for the same period.

These figures indicate potential liquidity concerns for Aqua Metals, Inc. (AQMS). The negative working capital and net loss suggest that the company may face challenges in meeting its short-term obligations and funding its operations. However, the cash and cash equivalents balance provides some cushion, but its adequacy needs to be assessed in relation to the company's ongoing expenses and liabilities.

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Aqua Metals, Inc. (AQMS) Valuation Analysis

Determining whether a company is overvalued or undervalued requires a multifaceted approach, incorporating various financial ratios, market trends, and analyst insights. This analysis will explore Aqua Metals, Inc. (AQMS) through key valuation metrics to provide investors with a comprehensive overview.

Is Aqua Metals, Inc. (AQMS) Overvalued or Undervalued?

To assess Aqua Metals, Inc. (AQMS)'s valuation, we will examine the following:

• Price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios
• Stock price trends over the last 12 months
• Analyst consensus on stock valuation (buy, hold, or sell)

Valuation Ratios:

Given that Aqua Metals Inc. (AQMS) is pre-revenue and unprofitable, certain valuation ratios like Price-to-Earnings (P/E) are not applicable. Instead, alternative metrics such as Price-to-Book (P/B) and Enterprise Value to EBITDA (EV/EBITDA) are more relevant.

• Price-to-Book (P/B) Ratio: As of early April 2025, Aqua Metals' Price-to-Book ratio is approximately 0.76x. A P/B ratio of less than 1 may indicate that the stock is undervalued compared to the company's net asset value.
• EV/EBITDA Ratio: Aqua Metals' Enterprise Value to EBITDA ratio is -0.6x. The negative value suggests that the company's EBITDA is negative, which is consistent with its status as a company that is still scaling its operations. Generally, an EV/EBITDA ratio below 10 is considered good, but this benchmark is less reliable when EBITDA is negative.

Stock Price Trends:

Over the past year, Aqua Metals (AQMS) has experienced significant volatility. The stock is down -84.71% over the last year. The 52-week range has been $1.33 and $11.40. As of April 10, 2025, AQMS is trading DOWN -38% since the beginning of the year.

Analyst Consensus:

The analyst consensus for Aqua Metals is 'Moderate Buy'. The average analyst price target for Aqua Metals is $3.00. This represents a potential upside of 92.31% from the recent price of $1.56.

Here is a summary of analyst ratings:

• Consensus Rating: Buy
• Number of analysts: 2
• Average price target: $21.50
• Highest price target: $40.00
• Lowest price target: $3.00

Additional Considerations:

Here is some additional data to consider:

Given the complexities of valuing a company like Aqua Metals, Inc. (AQMS), it is crucial to consider both quantitative metrics and qualitative factors. The analyst consensus suggests optimism, while the financial ratios indicate existing challenges. Exploring Aqua Metals, Inc. (AQMS) Investor Profile: Who’s Buying and Why?

Aqua Metals, Inc. (AQMS) Risk Factors

Aqua Metals, Inc. (AQMS) faces a variety of risks that could impact its financial health. These risks span internal operational challenges, external market pressures, and broader economic and regulatory factors.

Here's an overview of some key risk areas:

• Industry Competition: The battery recycling industry is competitive. New technologies or more efficient recycling methods developed by competitors could reduce the demand for Aqua Metals' services or put downward pressure on pricing.
• Regulatory Changes: Environmental regulations are constantly evolving. Stricter regulations on battery recycling, or changes in the classification of battery waste, could increase Aqua Metals' operating costs or limit its ability to process certain types of batteries.
• Market Conditions: Fluctuations in the prices of metals recovered from batteries (like lead, lithium, and nickel) can significantly impact Aqua Metals' revenue and profitability. A downturn in commodity prices could make recycling less economically attractive.

Operational, financial, and strategic risks are often detailed in the company's filings. Reviewing these documents provides insight into management's perspective on the most pressing challenges.

Examples of risks discussed in filings might include:

• Technology Scaling: Successfully scaling up its AquaRefining technology to commercial levels is critical. Any delays or technical difficulties in expanding production capacity could hurt the company's growth prospects.
• Financing Needs: Aqua Metals may require additional financing to fund its expansion plans. The availability of capital, and the terms under which it can be obtained, can impact the company's ability to execute its strategy.
• Customer Concentration: Reliance on a limited number of customers for a significant portion of revenue can create risk. Losing a major customer could negatively impact Aqua Metals' financial results.

Mitigation strategies can vary depending on the specific risk. Some common approaches include:

• Diversification: Expanding into new battery types or geographic markets can reduce reliance on any single source of revenue.
• Technological Innovation: Continuous improvement of the AquaRefining process can help maintain a competitive edge and improve efficiency.
• Strategic Partnerships: Collaborating with other companies in the battery supply chain can provide access to new markets, technologies, or financing.

Aqua Metals' mission, vision, and core values also play a role in how it approaches risk management. Learn more about these aspects at: Mission Statement, Vision, & Core Values of Aqua Metals, Inc. (AQMS).

Below is a hypothetical example of how Aqua Metals might present risk factors in its 2024 fiscal year filings. Note that this is an illustrative table and not actual data.

Understanding these risks and mitigation strategies is crucial for investors assessing Aqua Metals' long-term financial health and prospects.

Aqua Metals, Inc. (AQMS) Growth Opportunities

Aqua Metals, Inc. (AQMS) is focusing on recycling lithium-ion batteries, addressing a critical need as electric vehicle production and energy storage solutions expand. The company's future growth prospects are intertwined with its ability to scale its recycling technology and capitalize on the growing demand for sustainably sourced battery materials.

Key growth drivers for Aqua Metals, Inc. (AQMS) include:

• Product Innovations: Continuous improvements in its AquaRefining™ technology could enhance efficiency and reduce costs.
• Market Expansions: Expanding operations to new geographic markets and forming strategic alliances with battery manufacturers and electric vehicle companies.
• Strategic Partnerships: Collaborations to strengthen its supply chain and market reach.

Aqua Metals, Inc. (AQMS) possesses competitive advantages, particularly its focus on sustainable recycling processes and innovative technology, positioning it to benefit from the increasing emphasis on environmental responsibility within the battery industry.

While specific future revenue growth projections and earnings estimates are subject to market conditions and company performance, several strategic initiatives could significantly influence Aqua Metals, Inc. (AQMS)'s growth trajectory:

• Scaling up recycling capacity to meet rising demand.
• Securing long-term contracts with major battery manufacturers.
• Optimizing the recovery of valuable materials from spent batteries.

Here's a look at potential factors influencing Aqua Metals, Inc. (AQMS)'s financial future:

To gain a deeper understanding of Aqua Metals, Inc. (AQMS)'s financial health, you can explore additional insights here: Breaking Down Aqua Metals, Inc. (AQMS) Financial Health: Key Insights for Investors