Brookdale Senior Living Inc’s (NYSE:BKD): Brookdale Senior Living Inc. owns and operates senior living communities in the United States. The US$1.76b market-cap posted a loss in its most recent financial year of -US$571.42m and a latest trailing-twelve-month loss of -US$902.30m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is BKD’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for BKD, its year of breakeven and its implied growth rate.See our latest analysis for Brookdale Senior Living
According to the industry analysts covering BKD, breakeven is near. They expect the company to post a final loss in -1, before turning a profit of US$0 in . BKD is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which BKD must grow year-on-year. It turns out an average annual growth rate of 82.10% is expected, which is rather optimistic! If this rate turns out to be too aggressive, BKD may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for BKD given that this is a high-level summary, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. BKD currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and BKD has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on BKD, so if you are interested in understanding the company at a deeper level, take a look at BKD’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should look at:
- Valuation: What is BKD 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 BKD is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Brookdale Senior Living’s board and the CEO’s back ground.
- 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.