Yahoo Finance CarParts.com, Inc.'s (NASDAQ:PRTS) Profit Outlook
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. The US$237m market-cap company posted a loss in its most recent financial year of US$951k and a latest trailing-twelve-month loss of US$2.0m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on CarParts.com's investors mind, we've decided to gauge market sentiment. 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
CarParts.com is bordering on breakeven, according to the 5 American Specialty Retail analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$250k in 2024. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, 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, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that CarParts.com has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of CarParts.com to cover in one brief article, but the key fundamentals for the company can all be found in one place – CarParts.com's company page on Simply Wall St. We've also compiled a list of important factors you should further research:
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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