Ballard Power Systems Inc's (TSE:BLDP) Path To Profitability

Ballard Power Systems Inc's (TSE:BLDP): Ballard Power Systems Inc. engages in the design, development, manufacture, sale, and service of proton exchange membrane (PEM) fuel cell products worldwide. With the latest financial year loss of -US$8.05m and a trailing-twelve month of -US$10.61m, the US$688.30m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is BLDP’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for BLDP.

View our latest analysis for Ballard Power Systems

Expectation from Electrical analysts is BLDP is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$8.25m in 2020. Therefore, BLDP is expected to breakeven roughly a couple of months from now! What rate will BLDP have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 71.95%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

I’m not going to go through company-specific developments for BLDP given that this is a high-level summary, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before I wrap up, there’s one aspect worth mentioning. BLDP has managed its capital judiciously, with debt making up 5.66% of equity. This means that BLDP 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 BLDP 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 BLDP, take a look at BLDP’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further research:

1. Valuation: What is BLDP 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 BLDP 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 Ballard Power Systems’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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.