We Might See A Profit From R. R. Donnelley & Sons Company (NYSE:RRD) Soon
With the business potentially at an important milestone, we thought we'd take a closer look at R. R. Donnelley & Sons Company's (NYSE:RRD) future prospects. R.R. Donnelley & Sons Company, an integrated communications provider, enables organizations to create, manage, deliver, and optimize their multichannel marketing and business communications. With the latest financial year loss of US$26m and a trailing-twelve-month loss of US$35m, the US$462m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is R. R. Donnelley & Sons' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for R. R. Donnelley & Sons
R. R. Donnelley & Sons is bordering on breakeven, according to some American Commercial Services analysts. They expect the company to post a final loss in 2020, before turning a profit of US$63m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 104% 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.
We're not going to go through company-specific developments for R. R. Donnelley & Sons given that this is a high-level summary, though, 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.
One thing we would like to bring into light with R. R. Donnelley & Sons is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are too many aspects of R. R. Donnelley & Sons to cover in one brief article, but the key fundamentals for the company can all be found in one place – R. R. Donnelley & Sons' company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:
Valuation: What is R. R. Donnelley & Sons 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 R. R. Donnelley & Sons 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 R. R. Donnelley & Sons’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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