Analysts Expect FlexShopper, Inc. (NASDAQ:FPAY) To Breakeven Soon
FlexShopper, Inc. (NASDAQ:FPAY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. FlexShopper, Inc., a financial and technology company, operates an e-commerce marketplace to shop electronics, home furnishings, and other durable goods on a lease-to-own (LTO) basis. The US$59m market-cap company posted a loss in its most recent financial year of US$3.5m and a latest trailing-twelve-month loss of US$2.8m shrinking the gap between loss and breakeven. As path to profitability is the topic on FlexShopper'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 FlexShopper
According to the 3 industry analysts covering FlexShopper, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$3.2m in 2021. The company is therefore projected to breakeven around 12 months 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 138% is expected, which is rather optimistic! 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 FlexShopper given that this is a high-level summary, however, 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 FlexShopper is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on FlexShopper, so if you are interested in understanding the company at a deeper level, take a look at FlexShopper's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:
Historical Track Record: What has FlexShopper's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on FlexShopper'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.
This article by Simply Wall St is general in nature. 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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