FTD Companies, Inc.’s (NASDAQ:FTD): FTD Companies, Inc., together with its subsidiaries, operates as a floral and gifting company primarily in the United States, Canada, the United Kingdom, and the Republic of Ireland. With the latest financial year loss of -US$234.0m and a trailing-twelve month of -US$309.4m, the US$45m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which FTD will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for FTD, its year of breakeven and its implied growth rate.
Expectation from Online Retail analysts is FTD is on the verge of breakeven. They expect the company to post a final loss in 2018, before turning a profit of US$14m in 2019. Therefore, FTD is expected to breakeven roughly a few months from now. How fast will FTD have to grow each year in order to reach the breakeven point by 2019? Working backwards from analyst estimates, it turns out that they expect the company to grow 107% year-on-year, on average, which is rather optimistic! 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, I won’t go into details of FTD’s upcoming projects, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. FTD currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in FTD’s case, it has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are key fundamentals of FTD which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at FTD, take a look at FTD’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further research:
- Valuation: What is FTD 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 FTD 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 FTD Companies’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.
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