Stock Analysis

When Will Bombardier Inc. (TSE:BBD.A) Breakeven?

  •  Updated
TSX:BBD.A
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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. The company’s loss has recently broadened since it announced a US$305m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$560m, moving it further away from breakeven. Many investors are wondering about the rate at which Bombardier will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Bombardier

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$60m in 2023. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 88%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
TSX:BBD.A Earnings Per Share Growth September 29th 2022

We're not going to go through company-specific developments for Bombardier given that this is a high-level summary, however, keep in mind that generally 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.

Next Steps:

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

  1. 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.
  2. 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.
  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.

Valuation is complex, but we're helping make it simple.

Find out whether Bombardier is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About TSX:BBD.A

Bombardier

Bombardier Inc. engages in the manufacture and sale of business aircraft in Europe, North America, the Asia Pacific, and internationally.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation5
Future Growth4
Past Performance0
Financial Health2
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Undervalued with reasonable growth potential.