Icahn Enterprises L.P. (NASDAQ:IEP) About To Shift From Loss To Profit (2024)

Icahn Enterprises L.P. (NASDAQ:IEP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Icahn Enterprises L.P., through its subsidiaries, operates in investment, energy, automotive, food packaging, real estate, home fashion, and pharma businesses in the United States and Internationally. The US$18b market-cap company posted a loss in its most recent financial year of US$604m and a latest trailing-twelve-month loss of US$413m shrinking the gap between loss and breakeven. As path to profitability is the topic on Icahn Enterprises' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Icahn Enterprises

According to some industry analysts covering Icahn Enterprises, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$252m in 2023. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 159% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Icahn Enterprises' growth isn’t the focus of this broad overview, though, keep in mind that by and large 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. Icahn Enterprises currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Icahn Enterprises' case is 72%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Icahn Enterprises to cover in one brief article, but the key fundamentals for the company can all be found in one place – Icahn Enterprises' company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Valuation: What is Icahn Enterprises 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 Icahn Enterprises 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 Icahn Enterprises’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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