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Loss-Making Gladstone Commercial Corporation (NASDAQ:GOOD) Set To Breakeven

We feel now is a pretty good time to analyse Gladstone Commercial Corporation's (NASDAQ:GOOD) business as it appears the company may be on the cusp of a considerable accomplishment. Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. The US$504m market-cap company announced a latest loss of US$7.7m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Gladstone Commercial's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Gladstone Commercial

Gladstone Commercial is bordering on breakeven, according to the 3 American REITs analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$1.9m in 2024. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 136%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Gladstone Commercial's growth isn’t the focus of this broad overview, though, take into account that typically 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. Gladstone Commercial currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Gladstone Commercial 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 Gladstone Commercial, take a look at Gladstone Commercial's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

  1. Valuation: What is Gladstone Commercial 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 Gladstone Commercial is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Gladstone Commercial’s board and the CEO’s background.

  3. 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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