Analysts Are Optimistic We'll See A Profit From BRP Group, Inc. (NASDAQ:BRP)
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. operates as an insurance distribution company in the United States and internationally. The US$2.6b market-cap company announced a latest loss of US$16m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which BRP Group will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for BRP Group
Consensus from 6 of the American Insurance analysts is that BRP Group is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$6.3m in 2021. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 128% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for BRP Group given that this is a high-level summary, but, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with BRP Group is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in BRP Group's case is 50%. 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 key fundamentals of BRP Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at BRP Group, take a look at BRP Group's company page on Simply Wall St. We've also put together a list of important factors you should further examine:
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. 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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