Yahoo Finance Loss-Making Bombardier Inc. (TSE:BBD.B) Expected To Breakeven In The Medium-Term
Bombardier Inc. (TSE:BBD.B) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Bombardier Inc. engages in the manufacture and sale of business aircraft in Europe, North America, the Asia Pacific, and internationally. The CA$3.7b market-cap company posted a loss in its most recent financial year of US$305m and a latest trailing-twelve-month loss of US$560m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Bombardier's investors mind, we've decided to gauge market sentiment. 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 Bombardier
Consensus from 14 of the Canadian Aerospace & Defense analysts is that Bombardier is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$98m in 2023. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Bombardier's upcoming projects, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Bombardier currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are too many aspects of Bombardier to cover in one brief article, but the key fundamentals for the company can all be found in one place – Bombardier's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:
Valuation: What is Bombardier 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 Bombardier is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Bombardier’s board and the CEO’s background.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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