Consumer Durables News

Bang & Olufsen a/s’ (CPH:BO) Profit Outlook

Bang & Olufsen a/s (CPH:BO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Bang & Olufsen a/s designs, develops, and markets audio and video products in Denmark and internationally. On 31 May 2022, the kr.1.4b market-cap company posted a loss of kr.30m for its most recent financial year. Many investors are wondering about the rate at which Bang & Olufsen will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Bang & Olufsen

According to the 2 industry analysts covering Bang & Olufsen, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of kr.66m in 2024. The company is therefore projected to breakeven around 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 96%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

CPSE:BO Earnings Per Share Growth September 20th 2022

Given this is a high-level overview, we won’t go into details of Bang & Olufsen’s upcoming projects, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 31% 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.

Next Steps:

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

  1. Valuation: What is Bang & Olufsen 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 Bang & Olufsen 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 Bang & Olufsen’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.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether Bang & Olufsen is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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