Noodles & Company’s (NASDAQ:NDLS): Noodles & Company develops and operates fast casual restaurants in the United States. With the latest financial year loss of -US$71.68M and a trailing-twelve month of -US$90.34M, the US$275.50M market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which NDLS will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for NDLS, its year of breakeven and its implied growth rate.

Check out our latest analysis for Noodles

According to the industry analysts covering NDLS, breakeven is near. They expect the company to post a final loss in 2017, before turning a profit of US$1.44M in 2018. Therefore, NDLS is expected to breakeven roughly a couple of months from now! In order to meet this breakeven date, I calculated the rate at which NDLS must grow year-on-year. It turns out an average annual growth rate of 87.34% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

I’m not going to go through company-specific developments for NDLS given that this is a high-level summary, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I would like to bring into light with NDLS is its debt-to-equity ratio of 177.91%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in NDLS’s case, it has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is NDLS 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 NDLS 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 Noodles’s board and the CEO’s back ground.

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.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.