Breakeven On The Horizon For Lumber Liquidators Holdings Inc (NYSE:LL)
Lumber Liquidators Holdings Inc’s (NYSE:LL): Lumber Liquidators Holdings, Inc., together with its subsidiaries, operates as a multi-channel specialty retailer of hardwood flooring, and hardwood flooring enhancements and accessories. The US$654.98M market-cap company announced a latest loss of -US$37.82M on 31 December 2017 for its most recent financial year result. The most pressing concern for investors is LL’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for LL’s growth and when analysts expect the company to become profitable.
See our latest analysis for Lumber Liquidators Holdings
LL is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2017, before generating positive profits of US$24.05M in 2018. LL is therefore projected to breakeven around a couple of months from now! How fast will LL have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 42.83% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, LL may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of LL’s upcoming projects, however, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. LL has managed its capital prudently, with debt making up 7.58% of equity. This means that LL 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 too many aspects of LL to cover in one brief article, but the key fundamentals for the company can all be found in one place – LL’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further examine:
Valuation: What is LL 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 LL 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 Lumber Liquidators Holdings’s board and the CEO’s back ground.
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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
