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With the business potentially at an important milestone, we thought we'd take a closer look at Black Diamond Group Limited's (TSE:BDI) future prospects. Black Diamond Group Limited rents and sells modular space and workforce accommodation solutions. The CA$252m market-cap company posted a loss in its most recent financial year of CA$3.5m and a latest trailing-twelve-month loss of CA$647k shrinking the gap between loss and breakeven. As path to profitability is the topic on Black Diamond Group's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Black Diamond Group is bordering on breakeven, according to the 5 Canadian Commercial Services analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of CA$6.9m in 2021. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 110% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Black Diamond Group's growth isn’t the focus of this broad overview, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Black Diamond Group is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Black Diamond Group's case is 75%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are too many aspects of Black Diamond Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Black Diamond Group's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
Valuation: What is Black Diamond 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 Black Diamond Group 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 Black Diamond Group’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.
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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