When Will Bombardier Inc. (TSE:BBD.B) Become Profitable?

With the business potentially at an important milestone, we thought we'd take a closer look at Bombardier Inc.'s (TSE:BBD.B) future prospects. Bombardier Inc. engages in the manufacture and sale of business aircraft in Europe, North America, the Asia Pacific, and internationally. The CA$4.2b market-cap company announced a latest loss of US$305m on 31 December 2021 for its most recent financial year result. As path to profitability is the topic on Bombardier's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Bombardier

Consensus from 14 of the Canadian Aerospace & Defense analysts is that Bombardier is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$281m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 71% is expected, 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 Bombardier's upcoming projects, 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 we would like to bring into light with Bombardier is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. 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 compiled a list of important factors you should further examine:

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.

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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.