We think it’s a good time to analyze LSB Industries, Inc. (NYSE:LXU) As it seems, the company may be on the verge of a huge achievement. LSB Industries, Inc. is engaged in the manufacture, marketing and sale of chemical products. With the last loss of $220 million in the fiscal year and a loss of $47 million in the last twelve months, the $1.2 billion market capitalization company has mitigated its loss by closing in on its balance goal. The most pressing concern for investors is LSB Industries’ path to profitability – when will it break even? Below, we’ll provide a high-level summary of industry analysts’ expectations for the company.
Discover our latest analysis for LSB Industries
According to the 2 sector analysts covering LSB Industries, the consensus is that the balance is close. They predict the business will incur a terminal loss in 2021, before generating positive profits of US$203 million in 2022. So the business should break even in about a year or less! How fast will the business need to grow to achieve the consensus estimates predicting breakeven in less than 12 months? Using a line of best fit, we calculated an average annual growth rate of 69%, which signals high confidence from analysts. If the business grows at a slower rate, it will become profitable later than expected.
Since this is a high-level preview, we won’t go into detail about LSB Industries’ upcoming plans, but keep in mind that, overall, an expected growth rate high is not unusual for a company currently going through an investment period. .
One thing we would like to highlight with LSB Industries is its 118% debt ratio. Generally, the rule of thumb is that debt should not exceed 40% of your equity, and the company has far exceeded that figure. Note that higher debt increases the risk of investing in the loss-making business.
This article is not intended to be a comprehensive analysis of LSB Industries, so if you are interested in understanding the company on a deeper level, take a look at LSB Industries’ company page on Simply Wall St. We’ve also compiled a list of relevant factors you should research further:
Evaluation: What is LSB Industries worth today? Has future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether LSB Industries is currently being mispriced by the market.
Management team: An experienced management team at the helm boosts our confidence in the business – look at who sits on the LSB Industries board and the CEO’s background.
Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Explore our free list of these great stocks here.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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