Bombardier Inc. (TSE:BBD.A) 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. With the latest financial year loss of US$305m and a trailing-twelve-month loss of US$560m, the CA$3.0b market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Bombardier 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.
Bombardier is bordering on breakeven, according to the 13 Canadian Aerospace & Defense analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$59m in 2023. The company is therefore projected to breakeven just over a year from now. 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 91% is expected, which is rather optimistic! 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, but, take into account 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. 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.
There are key fundamentals of Bombardier 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 Bombardier, take a look at Bombardier's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:
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.
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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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