When Will Ballard Power Systems Inc. (TSE:BLDP) Breakeven?

By
Simply Wall St
Published
October 26, 2020
TSX:BLDP

With the business potentially at an important milestone, we thought we'd take a closer look at Ballard Power Systems Inc.'s (TSE:BLDP) future prospects. Ballard Power Systems Inc. engages in the design, development, manufacture, sale, and service of proton exchange membrane fuel cell products. With the latest financial year loss of US$39m and a trailing-twelve-month loss of US$45m, the CA$5.5b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Ballard Power Systems' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Ballard Power Systems

According to the 9 industry analysts covering Ballard Power Systems, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$14m in 2023. The company is therefore projected to breakeven around 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 71% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
TSX:BLDP Earnings Per Share Growth October 26th 2020

Given this is a high-level overview, we won’t go into details of Ballard Power Systems' upcoming projects, 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 we wrap up, there’s one aspect worth mentioning. Ballard Power Systems currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Ballard Power Systems which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Ballard Power Systems, take a look at Ballard Power Systems' company page on Simply Wall St. We've also put together a list of essential factors you should further research:

  1. Historical Track Record: What has Ballard Power Systems' 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 Ballard Power Systems' 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. 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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