CarParts.com Inc (PRTS) has disclosed a new risk, in the Accounting & Financial Operations category.
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CarParts.com Inc. faces significant financial risk if it fails to effectively utilize its net operating loss (NOL) carry-forwards, valued at $99,578 for federal and $81,697 for state taxes as of September 28, 2024. The company’s adoption of a Tax Benefits Preservation Agreement aims to safeguard these assets by preventing ownership changes that could limit NOL utilization under Section 382 of the Internal Revenue Code. However, this strategy may inadvertently hinder potential takeovers or management changes, as the Rights Agreement imposes ownership restrictions on stockholders. Consequently, if CarParts.com cannot apply its NOLs before expiration or prove past losses, it risks diminished tax benefits and increased tax liabilities, adversely affecting its financial outcomes.
The average PRTS stock price target is $1.40, implying 68.65% upside potential.
To learn more about CarParts.com Inc’s risk factors, click here.