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Market Sentiment Around Loss-Making Bilfinger SE (FRA:GBF)

Mercedes Harden

Bilfinger SE’s (DB:GBF): Bilfinger SE provides engineering and other industrial services to customers in the process industry. On 31 December 2017, the €1.76B market-cap posted a loss of -€143.00M for its most recent financial year. Many investors are wondering the rate at which GBF will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for GBF.

See our latest analysis for Bilfinger

Expectation from analysts is GBF is on the verge of breakeven. They expect the company to post a final loss in 2017, before turning a profit of €27.17M in 2018. So, GBF is predicted to breakeven approximately a few months from now. How fast will GBF have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 66.93% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

DB:GBF Past Future Earnings May 2nd 18

I’m not going to go through company-specific developments for GBF given that this is a high-level summary, 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.

One thing I’d like to point out is that GBF has managed its capital judiciously, with debt making up 36.97% of equity. This means that GBF has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of GBF which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at GBF, take a look at GBF’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should further examine:

  1. Valuation: What is GBF 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 GBF 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 Bilfinger’s board and the CEO’s back ground.
  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.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.