Yahoo Finance Carrols Restaurant Group, Inc. (NASDAQ:TAST) About To Shift From Loss To Profit
With the business potentially at an important milestone, we thought we'd take a closer look at Carrols Restaurant Group, Inc.'s (NASDAQ:TAST) future prospects. Carrols Restaurant Group, Inc., through its subsidiaries, operates as a restaurant company in the United States. The US$306m market-cap company’s loss lessened since it announced a US$76m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$15m, as it approaches breakeven. The most pressing concern for investors is Carrols Restaurant Group'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 Carrols Restaurant Group
According to the 4 industry analysts covering Carrols Restaurant Group, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$21m in 2023. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 114% 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.
We're not going to go through company-specific developments for Carrols Restaurant Group given that this is a high-level summary, though, take into account that generally 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 Carrols Restaurant Group is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Carrols Restaurant Group, so if you are interested in understanding the company at a deeper level, take a look at Carrols Restaurant Group's company page on Simply Wall St. We've also put together a list of essential factors you should look at:
Valuation: What is Carrols Restaurant Group 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 Carrols Restaurant Group 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 Carrols Restaurant Group’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.
