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Jun 07, 2023

CarParts.com, Inc.'s (NASDAQ:PRTS) Path To Profitability

Stock Analysis We feel now is a pretty good time to analyse CarParts.com, Inc.'s (NASDAQ:PRTS) business as it appears the company may be on the cusp of a considerable accomplishment. CarParts.com,

Stock Analysis

We feel now is a pretty good time to analyse CarParts.com, Inc.'s (NASDAQ:PRTS) business as it appears the company may be on the cusp of a considerable accomplishment. CarParts.com, Inc., together with its subsidiaries, operates as an online provider of aftermarket auto parts and accessories in the United States and the Philippines. With the latest financial year loss of US$951k and a trailing-twelve-month loss of US$6.8m, the US$272m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is CarParts.com's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for CarParts.com

CarParts.com is bordering on breakeven, according to the 5 American Specialty Retail analysts. They expect the company to post a final loss in 2024, before turning a profit of US$7.1m in 2025. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% 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.

Underlying developments driving CarParts.com's growth isn’t the focus of this broad overview, though, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. CarParts.com currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

There are key fundamentals of CarParts.com 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 CarParts.com, take a look at CarParts.com's company page on Simply Wall St. We've also put together a list of important factors you should further research:

What are the risks and opportunities for CarParts.com?

NasdaqGS:PRTS

CarParts.com

CarParts.com, Inc., together with its subsidiaries, operates as an online provider of aftermarket auto parts and accessories in the United States and the Philippines.Show more

Rewards

Trading at 76.5% below our estimate of its fair value

Earnings are forecast to grow 65.16% per year

Risks

Shareholders have been diluted in the past year

Share Price

Market Cap

1Y Return

Further research onCarParts.com

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.

CarParts.com, Inc., together with its subsidiaries, operates as an online provider of aftermarket auto parts and accessories in the United States and the Philippines.

Flawless balance sheet with reasonable growth potential.