Stock Analysis

Analysts Are Optimistic We'll See A Profit From Lifetime Brands, Inc. (NASDAQ:LCUT)

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NasdaqGS:LCUT
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Lifetime Brands, Inc. (NASDAQ:LCUT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Lifetime Brands, Inc. designs, sources, and sells branded kitchenware, tableware, and other products for use in the home in the United States and internationally. The US$319m market-cap company announced a latest loss of US$3.0m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Lifetime Brands' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Lifetime Brands

Consensus from 2 of the American Consumer Durables analysts is that Lifetime Brands is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$23m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 88%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
NasdaqGS:LCUT Earnings Per Share Growth May 3rd 2021

Given this is a high-level overview, we won’t go into details of Lifetime Brands' upcoming projects, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Lifetime Brands currently has a debt-to-equity ratio of 125%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Lifetime Brands 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 Lifetime Brands, take a look at Lifetime Brands' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further examine:

  1. Valuation: What is Lifetime Brands 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 Lifetime Brands is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lifetime Brands’s board and the CEO’s background.
  3. 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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