Analysts Are Optimistic We'll See A Profit From HireRight Holdings Corporation (NYSE:HRT)

We feel now is a pretty good time to analyse HireRight Holdings Corporation's (NYSE:HRT) business as it appears the company may be on the cusp of a considerable accomplishment. HireRight Holdings Corporation provides technology-driven workforce risk management and compliance solutions. The US$1.0b market-cap company’s loss lessened since it announced a US$92m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$27m, as it approaches breakeven. Many investors are wondering about the rate at which HireRight Holdings 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.

Check out our latest analysis for HireRight Holdings

According to the 9 industry analysts covering HireRight Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$45m in 2022. The company is therefore projected to breakeven around 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 87%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

We're not going to go through company-specific developments for HireRight Holdings given that this is a high-level summary, however, bear in mind 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 issue worth mentioning. HireRight Holdings currently has a debt-to-equity ratio of over 2x. Typically, 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:

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

1. Valuation: What is HireRight 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 HireRight 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 HireRight 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.