Analysts Are Optimistic We'll See A Profit From Custom Truck One Source, Inc. (NYSE:CTOS)
We feel now is a pretty good time to analyse Custom Truck One Source, Inc.'s (NYSE:CTOS) business as it appears the company may be on the cusp of a considerable accomplishment. Custom Truck One Source, Inc. provides specialty equipment rental services to the electric utility transmission and distribution, telecom, and rail industries in North America. With the latest financial year loss of US$21m and a trailing-twelve-month loss of US$185m, the US$1.8b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Custom Truck One Source's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Custom Truck One Source
Consensus from 5 of the American Trade Distributors analysts is that Custom Truck One Source is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$29m in 2022. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 71% is expected, which signals high confidence from analysts. 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 Custom Truck One Source's upcoming projects, but, keep in mind 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 Custom Truck One Source is its debt-to-equity ratio of 185%. Typically, 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.
There are key fundamentals of Custom Truck One Source 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 Custom Truck One Source, take a look at Custom Truck One Source's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:
Valuation: What is Custom Truck One Source 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 Custom Truck One Source is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Custom Truck One Source’s board and the CEO’s background.
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.