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Omni Bridgeway Limited's (ASX:OBL) About To Shift From Loss To Profit

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·3 min read
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We feel now is a pretty good time to analyse Omni Bridgeway Limited's (ASX:OBL) business as it appears the company may be on the cusp of a considerable accomplishment. 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. On 30 June 2020, the AU$1.1b market-cap company posted a loss of AU$12m for its most recent financial year. As path to profitability is the topic on Omni Bridgeway's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Omni Bridgeway

Consensus from 2 of the Australian Diversified Financial analysts is that Omni Bridgeway is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of AU$155m in 2021. So, the company is predicted to breakeven approximately a year 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 32% is expected, which is extremely buoyant. 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 Omni Bridgeway's growth isn’t the focus of this broad overview, however, take into account that by and large 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 19% 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.

Next Steps:

There are too many aspects of Omni Bridgeway to cover in one brief article, but the key fundamentals for the company can all be found in one place – Omni Bridgeway's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

  1. 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.

  2. 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.

  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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.