Breakeven Is Near for Ranpak Holdings Corp. (NYSE:PACK)

By
Simply Wall St
Published
March 10, 2022
NYSE:PACK
Source: Shutterstock

We feel now is a pretty good time to analyse Ranpak Holdings Corp.'s (NYSE:PACK) business as it appears the company may be on the cusp of a considerable accomplishment. Ranpak Holdings Corp., together with its subsidiaries, provide product protection solutions for e-commerce and industrial supply chains in North America, Europe, and Asia. The US$1.8b market-cap company announced a latest loss of US$2.8m on 31 December 2021 for its most recent financial year result. The most pressing concern for investors is Ranpak Holdings' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Ranpak Holdings

Ranpak Holdings is bordering on breakeven, according to the 5 American Packaging analysts. They expect the company to post a final loss in 2021, before turning a profit of US$8.5m in 2022. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 55% year-on-year, on average, 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
NYSE:PACK Earnings Per Share Growth March 10th 2022

Given this is a high-level overview, we won’t go into details of Ranpak Holdings' upcoming projects, though, bear in mind that generally 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. Ranpak Holdings currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Ranpak Holdings' case is 64%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

  1. Valuation: What is Ranpak Holdings 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 Ranpak Holdings 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 Ranpak Holdings’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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