Yahoo Finance When Will CarParts.com, Inc. (NASDAQ:PRTS) Turn A Profit?
CarParts.com, Inc. (NASDAQ:PRTS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. CarParts.com, Inc., together with its subsidiaries, operates as an online provider of aftermarket auto parts and accessories in the United States and the Philippines. With the latest financial year loss of US$10m and a trailing-twelve-month loss of US$5.5m, the US$382m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which CarParts.com will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for CarParts.com
According to the 5 industry analysts covering CarParts.com, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$23m in 2024. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 66%, 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.
We're not going to go through company-specific developments for CarParts.com given that this is a high-level summary, but, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 4.8% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of CarParts.com 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 CarParts.com, take a look at CarParts.com's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:
Valuation: What is CarParts.com 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 CarParts.com 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 CarParts.com’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.
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.
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