Bristow Group Inc. (NYSE:VTOL) Could Be Less Than A Year Away From Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Bristow Group Inc.'s (NYSE:VTOL) future prospects. Bristow Group Inc. provides industrial aviation services to the offshore energy industry worldwide. With the latest financial year loss of US$723m and a trailing-twelve-month loss of US$214m, the US$738m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Bristow Group will turn a profit, with the big question being “when will the company 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 Bristow Group

Bristow Group is bordering on breakeven, according to some American Energy Services analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$59m in 2021. The company is therefore projected to breakeven around 12 months 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 51%, which is extremely buoyant. 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 Bristow Group given that this is a high-level summary, though, take into account that typically an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we would like to bring into light with Bristow Group is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Bristow Group's case is 64%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Bristow 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 Bristow 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 Bristow 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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