Loss-Making CarLotz, Inc. (NASDAQ:LOTZ) Expected To Breakeven In The Medium-Term
We feel now is a pretty good time to analyse CarLotz, Inc.'s (NASDAQ:LOTZ) business as it appears the company may be on the cusp of a considerable accomplishment. CarLotz, Inc. operates as a consignment-to-retail used vehicle marketplace that provides its corporate vehicle sourcing partners and retail sellers of used vehicles. The company’s loss has recently broadened since it announced a US$8.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$32m, moving it further away from breakeven. The most pressing concern for investors is CarLotz's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for CarLotz
CarLotz is bordering on breakeven, according to the 3 American Specialty Retail analysts. They expect the company to post a final loss in 2023, before turning a profit of US$44m in 2024. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 62% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of CarLotz's upcoming projects, but, take into account that by and large 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. The company has managed its capital prudently, with debt making up 11% of equity. This means that it 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 key fundamentals of CarLotz 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 CarLotz, take a look at CarLotz's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:
Historical Track Record: What has CarLotz'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 CarLotz'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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
