Analysts Expect Breakeven For Black Diamond Group Limited (TSE:BDI) Before Long

Black Diamond Group Limited (TSE:BDI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Black Diamond Group Limited rents and sells modular space and workforce accommodation solutions. With the latest financial year loss of CA$7.5m and a trailing-twelve-month loss of CA$3.8m, the CA$148m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Black Diamond Group's 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.

Check out our latest analysis for Black Diamond Group

Consensus from 5 of the Canadian Commercial Services analysts is that Black Diamond Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of CA$4.6m in 2021. The company is therefore projected 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 124%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Black Diamond Group given that this is a high-level summary, however, take into account that generally 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 issue worth mentioning. Black Diamond Group currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Black Diamond Group's case is 52%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Black Diamond Group, so if you are interested in understanding the company at a deeper level, take a look at Black Diamond Group's company page on Simply Wall St. We've also put together a list of important aspects you should further examine:

1. Valuation: What is Black Diamond Group 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 Black Diamond Group 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 Black Diamond Group’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.

When trading Black Diamond Group or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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