FlexShopper, Inc. (NASDAQ:FPAY) Could Be Less Than A Year Away From Profitability

FlexShopper, Inc. (NASDAQ:FPAY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. FlexShopper, Inc., a financial and technology company, operates an e-commerce marketplace to shop electronics, home furnishings, and other durable goods on a lease-to-own (LTO) basis. The US$52m market-cap company announced a latest loss of US$3.5m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which FlexShopper will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for FlexShopper

Consensus from 3 of the American Diversified Financial analysts is that FlexShopper is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$5.0m in 2021. So, the company is predicted to breakeven approximately a year 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 113%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for FlexShopper given that this is a high-level summary, but, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with FlexShopper is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of FlexShopper to cover in one brief article, but the key fundamentals for the company can all be found in one place – FlexShopper's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

1. Historical Track Record: What has FlexShopper'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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on FlexShopper'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.

If you decide to trade FlexShopper, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.