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With the business potentially at an important milestone, we thought we'd take a closer look at Omni Bridgeway Limited's (ASX:OBL) future prospects. Omni Bridgeway Limited engages in investing in litigation and dispute resolution matters in Australia, the United States, Canada, Asia, Europe, the Middle East, and Africa. The AU$1.0b market-cap company posted a loss in its most recent financial year of AU$12m and a latest trailing-twelve-month loss of AU$47m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Omni Bridgeway's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Omni Bridgeway is bordering on breakeven, according to the 2 Australian Diversified Financial analysts. They expect the company to post a final loss in 2021, before turning a profit of AU$263m in 2022. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 82% year-on-year, on average, 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 Omni Bridgeway's upcoming projects, but, bear in mind that generally 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 22% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Omni Bridgeway, so if you are interested in understanding the company at a deeper level, take a look at Omni Bridgeway's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:
Historical Track Record: What has Omni Bridgeway'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 Omni Bridgeway'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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