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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 primarily in the United States and the Philippines. The US$774m market-cap company announced a latest loss of US$1.5m on 02 January 2021 for its most recent financial year result. 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?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
CarParts.com is bordering on breakeven, according to the 3 American Online Retail analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$2.3m in 2022. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of CarParts.com's upcoming projects, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. CarParts.com currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
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 compiled a list of pertinent aspects you should further examine:
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.
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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