We feel now is a pretty good time to analyse Franklin Covey Co.'s (NYSE:FC) business as it appears the company may be on the cusp of a considerable accomplishment. Franklin Covey Co. provides training and consulting services in the areas of execution, sales performance, productivity, customer loyalty, leadership, and educational improvement for organizations and individuals worldwide. The US$373m market-cap company posted a loss in its most recent financial year of US$9.4m and a latest trailing-twelve-month loss of US$9.8m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Franklin Covey's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Franklin Covey

According to the 4 industry analysts covering Franklin Covey, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$535k 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 144%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Franklin Covey's growth isn’t the focus of this broad overview, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 32% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Franklin Covey, so if you are interested in understanding the company at a deeper level, take a look at Franklin Covey's company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:

1. Valuation: What is Franklin Covey 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 Franklin Covey 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 Franklin Covey’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.

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.

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