Breakeven On The Horizon For Triumph Group, Inc. (NYSE:TGI)

We feel now is a pretty good time to analyse Triumph Group, Inc.'s (NYSE:TGI) business as it appears the company may be on the cusp of a considerable accomplishment. Triumph Group, Inc. designs, engineers, manufactures, repairs, overhauls, and distributes aerostructures, aircraft components, accessories, subassemblies, and systems worldwide. With the latest financial year loss of US$28m and a trailing-twelve-month loss of US$451m, the US$946m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Triumph Group'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 Triumph Group

According to the 10 industry analysts covering Triumph Group, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$17m in 2022. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 102% year-on-year, on average, 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 Triumph Group given that this is a high-level summary, but, take into account that typically a high growth rate 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 Triumph Group is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of Triumph Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Triumph Group's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Valuation: What is Triumph 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 Triumph 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 Triumph 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.

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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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