When Can We Expect A Profit From BrightSpire Capital, Inc. (NYSE:BRSP)?
We feel now is a pretty good time to analyse BrightSpire Capital, Inc.'s (NYSE:BRSP) business as it appears the company may be on the cusp of a considerable accomplishment. BrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States. With the latest financial year loss of US$354m and a trailing-twelve-month loss of US$235m, the US$1.2b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is BrightSpire Capital'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.
Check out our latest analysis for BrightSpire Capital
BrightSpire Capital is bordering on breakeven, according to the 2 American Mortgage REITs analysts. They expect the company to post a final loss in 2021, before turning a profit of US$85m in 2022. So, the company is predicted to breakeven just over a year from now. 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 157%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving BrightSpire Capital's growth isn’t the focus of this broad overview, however, take into account 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 issue worth mentioning. BrightSpire Capital currently has a debt-to-equity ratio of over 2x. 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 around investing in the loss-making company.
Next Steps:
There are key fundamentals of BrightSpire Capital which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at BrightSpire Capital, take a look at BrightSpire Capital's company page on Simply Wall St. We've also put together a list of key aspects you should further research:
Historical Track Record: What has BrightSpire Capital's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on BrightSpire Capital'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.
