YRC Worldwide Inc’s (NASDAQ:YRCW): YRC Worldwide Inc., through its subsidiaries, provides various transportation services primarily in North America. The US$321.70M market-cap company announced a latest loss of -US$10.80M on 31 December 2017 for its most recent financial year result. The most pressing concern for investors is YRCW’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for YRCW, its year of breakeven and its implied growth rate.
According to the industry analysts covering YRCW, breakeven is near. They anticipate the company to incur a final loss in 2017, before generating positive profits of US$30.03M in 2018. Therefore, YRCW is expected to breakeven roughly a few months from now. In order to meet this breakeven date, I calculated the rate at which YRCW must grow year-on-year. It turns out an average annual growth rate of 101.56% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, YRCW may become profitable much later than analysts predict.
Underlying developments driving YRCW’s growth isn’t the focus of this broad overview, though, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I would like to bring into light with YRCW is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
There are too many aspects of YRCW to cover in one brief article, but the key fundamentals for the company can all be found in one place – YRCW’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further research:
- Valuation: What is YRCW 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 YRCW 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 YRC Worldwide’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.