Cal-Maine Foods Inc’s (NASDAQ:CALM): Cal-Maine Foods, Inc. produces, grades, packages, markets, and distributes shell eggs. The US$2.14B market-cap company’s loss lessens since it announced a -US$74.28M bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$62.46M, as it approaches breakeven. As path to profitability is the topic on CALM’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for CALM.
According to the industry analysts covering CALM, breakeven is near. They anticipate the company to incur a final loss in 2017, before generating positive profits of US$38.60M in 2018. Therefore, CALM is expected to breakeven roughly a few months from now. What rate will CALM have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 137.01%, which is rather optimistic! If this rate turns out to be too aggressive, CALM may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for CALM given that this is a high-level summary, but, bear in mind that typically 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. CALM has managed its capital prudently, with debt making up 1.06% of equity. This means that CALM has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of CALM to cover in one brief article, but the key fundamentals for the company can all be found in one place – CALM’s company page on Simply Wall St. I’ve also put together a list of essential factors you should further research:
- Valuation: What is CALM 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 CALM 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 Cal-Maine Foods’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.