We feel now is a pretty good time to analyse Franklin Covey Co.’s (NYSE:FC) business as it appears the company may be on the cusp of a considerable accomplishment. Franklin Covey Co. provides training and consulting services in the areas of execution, sales performance, productivity, customer loyalty, leadership, and educational improvement for organizations and individuals worldwide. With the latest financial year loss of US$9.4m and a trailing-twelve-month loss of US$9.8m, the US$360m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Franklin Covey’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 Franklin Covey
According to the 4 industry analysts covering Franklin Covey, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$535k in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 144% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Franklin Covey’s growth isn’t the focus of this broad overview, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 32% 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.
There are key fundamentals of Franklin Covey 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 Franklin Covey, take a look at Franklin Covey’s company page on Simply Wall St. We’ve also compiled a list of important aspects you should look at:
- Valuation: What is Franklin Covey 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 Franklin Covey 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 Franklin Covey’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. 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.
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