With the company potentially at an important milestone, we thought we would take a closer look Five Star Senior Living Inc. (NASDAQ: FVE) future prospects. Five Star Senior Living Inc. operates and manages senior residences in the United States. The US $ 128 million market-capitalization company recorded a loss of US $ 7.6 million in its most recent fiscal year and a last year-over-year loss of US $ 2.4 million, narrowing the gap between loss and breakeven point. Many investors question the rate at which Five Star Senior Living will make a profit, the big question being “when does the business break even?” We’ve put together a brief rundown of industry analysts’ expectations for the company, its breakeven year, and its implied growth rate.
According to the 2 industry analysts covering Five Star Senior Living, the consensus is that the breakeven point is near. They predict that the company will suffer one final loss in 2021, before generating positive profits of $ 2.1 million in 2022. Thus, the company is expected to break even in just over a year. How fast will the company have to grow from one year to the next to reach equilibrium on that date? Using a line of best fit, we calculated an average annual growth rate of 120%, which is extremely strong. If the business grows at a slower pace, it will become profitable later than expected.
NasdaqCM: FVE Growth in earnings per share October 30, 2021
Since this is a high-level look, we won’t go into details of upcoming Five Star Senior Living projects, but keep in mind that a high predicted growth rate won’t go into detail. is generally not unusual for a company that is currently going through a period of investment.
One thing we would like to point out is that the company has managed its capital prudently, with debt accounting for 3.5% of equity. This means that it has mainly financed its operations from equity and its low debt reduces the risk of investing in the loss-making company.
This article is not intended to be a comprehensive review of Five Star Senior Living, so if you want to understand the business on a deeper level, take a look at the Five Star Senior Living business page on Simply Wall. St. We’ve also compiled a list of essential factors you should research further:
- Evaluation: What is Five Star Senior Living worth today? Has the potential for future growth already been factored into the price? The intrinsic value infographic in our free research report helps to visualize whether Five Star Senior Living is currently being poorly valued by the market.
- Management team: An experienced management team at the helm increases our confidence in the company – look at who sits on the Five Star Senior Living board and the CEO’s background.
- Other high performing stocks: Are there other stocks that offer better prospects with a proven track record? Check out our free list of these great stocks here.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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