Bigblu Broadband plc's (LON:BBB) Has Found A Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Bigblu Broadband plc's (LON:BBB) future prospects. Bigblu Broadband plc provides satellite, and wireless broadband telecommunications and related products and services in the United Kingdom, Europe, Australia, and internationally. The UK£63m market-cap company posted a loss in its most recent financial year of UK£8.0m and a latest trailing-twelve-month loss of UK£14m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Bigblu Broadband's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Bigblu Broadband

Expectations from some of the British Telecom analysts is that Bigblu Broadband is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of UK£1.2m in 2021. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 8.2%, which is fair. If this rate turns out to be too low, the company may become profitable faster than analysts expect.

We're not going to go through company-specific developments for Bigblu Broadband given that this is a high-level summary, though, keep in mind that typically periods of lower growth in the upcoming years 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 Bigblu Broadband is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on Bigblu Broadband, so if you are interested in understanding the company at a deeper level, take a look at Bigblu Broadband's company page on Simply Wall St. We've also compiled a list of important factors you should further research:

1. Valuation: What is Bigblu Broadband 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 Bigblu Broadband 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 Bigblu Broadband’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. 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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