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We feel now is a pretty good time to analyse BRP Group, Inc.'s (NASDAQ:BRP) business as it appears the company may be on the cusp of a considerable accomplishment. BRP Group, Inc. markets and sells insurance products and services in the United States. The US$3.8b market-cap company posted a loss in its most recent financial year of US$16m and a latest trailing-twelve-month loss of US$8.7m shrinking the gap between loss and breakeven. The most pressing concern for investors is BRP Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 7 industry analysts covering BRP Group, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$15m in 2022. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 129% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving BRP Group's growth isn’t the focus of this broad overview, but, bear in mind that typically 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. BRP Group currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in BRP Group's case is 63%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on BRP Group, so if you are interested in understanding the company at a deeper level, take a look at BRP Group's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:
Historical Track Record: What has BRP Group's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on BRP Group'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.
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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