Bang & Olufsen A/S (CPH:BO) Is Expected To Breakeven In The Near Future

With the business potentially at an important milestone, we thought we'd take a closer look at Bang & Olufsen A/S' (CPH:BO) future prospects. Bang & Olufsen A/S designs, develops, markets, manufactures, and sells audio and video products in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The kr.2.0b market-cap company posted a loss in its most recent financial year of kr.17m and a latest trailing-twelve-month loss of kr.62m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Bang & Olufsen's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Bang & Olufsen

Bang & Olufsen is bordering on breakeven, according to the 2 Danish Consumer Durables analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr.28m in 2026. Therefore, the company is expected to breakeven just over a year from now. 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 118%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Bang & Olufsen given that this is a high-level summary, though, keep in mind 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’d like to point out is that The company has managed its capital prudently, with debt making up 39% of equity. This means that it 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 too many aspects of Bang & Olufsen to cover in one brief article, but the key fundamentals for the company can all be found in one place – Bang & Olufsen's company page on Simply Wall St. We've also compiled a list of essential factors you should look at:

1. Valuation: What is Bang & Olufsen 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 Bang & Olufsen 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 Bang & Olufsen’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.