Five Star Senior Living Inc. (NASDAQ:FVE): When Will It Breakeven?
With the business potentially at an important milestone, we thought we'd take a closer look at Five Star Senior Living Inc.'s (NASDAQ:FVE) future prospects. Five Star Senior Living Inc. operates and manages senior living communities in the United States. The US$129m market-cap company posted a loss in its most recent financial year of US$7.6m and a latest trailing-twelve-month loss of US$16m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Five Star Senior Living's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Five Star Senior Living
Five Star Senior Living is bordering on breakeven, according to the 2 American Healthcare analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$13m in 2023. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 95% is expected, 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 Five Star Senior Living's growth isn’t the focus of this broad overview, however, 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’d like to point out is that The company has managed its capital judiciously, with debt making up 3.6% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Five Star Senior Living to cover in one brief article, but the key fundamentals for the company can all be found in one place – Five Star Senior Living's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:
Historical Track Record: What has Five Star Senior Living's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Five Star Senior Living'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. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
