With the business potentially at an important milestone, we thought we'd take a closer look at BRC Inc.'s (NYSE:BRCC) future prospects. BRC Inc., through its subsidiaries, purchases, roasts, and sells coffee, coffee accessories, and branded apparel in the United States. The US$986m market-cap company announced a latest loss of US$17m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is BRC's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 7 industry analysts covering BRC, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$2.6m in 2024. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 57% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
NYSE:BRCC Earnings Per Share Growth March 9th 2024
Given this is a high-level overview, we won't go into details of BRC's upcoming projects, though, take into account that by and large 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 BRC is its debt-to-equity ratio of 153%. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in this case, the company has significantly overshot. 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 BRC, so if you are interested in understanding the company at a deeper level, take a look at BRC's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:
Valuation: What is BRC 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 BRC 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 BRC'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.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
