We feel now is a pretty good time to analyse Omni Bridgeway Limited's (ASX:OBL) business as it appears the company may be on the cusp of a considerable accomplishment. Omni Bridgeway Limited engages in investing in litigation and dispute resolution matters in Australia, the United States, Canada, Asia, Europe, the Middle East, and Africa. On 30 June 2021, the AU$845m market-cap company posted a loss of AU$25m for its most recent financial year. As path to profitability is the topic on Omni Bridgeway'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.
According to the 2 industry analysts covering Omni Bridgeway, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of AU$51m in 2022. The company is therefore projected to breakeven around 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 66%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Omni Bridgeway's upcoming projects, though, bear 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 19% 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.
This article is not intended to be a comprehensive analysis on Omni Bridgeway, so if you are interested in understanding the company at a deeper level, take a look at Omni Bridgeway's company page on Simply Wall St. We've also compiled a list of essential factors you should look at:
Valuation: What is Omni Bridgeway 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 Omni Bridgeway 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 Omni Bridgeway’s board and the CEO’s background.
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.