In This Article:
Cornerstone Building Brands, Inc. (NYSE:CNR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Cornerstone Building Brands, Inc., together with its subsidiaries, designs, engineers, manufactures, markets, and installs external building products for the commercial, residential, and repair and remodel markets in the United States, Canada, Mexico, and internationally. On 31 December 2020, the US$1.5b market-cap company posted a loss of US$483m for its most recent financial year. The most pressing concern for investors is Cornerstone Building Brands' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Cornerstone Building Brands
Consensus from 3 of the American Building analysts is that Cornerstone Building Brands is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$81m in 2021. So, the company is predicted to breakeven approximately a year 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 141% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Cornerstone Building Brands' upcoming projects, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Cornerstone Building Brands is its 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. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Cornerstone Building Brands to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cornerstone Building Brands' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
-
Valuation: What is Cornerstone Building Brands 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 Cornerstone Building Brands 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 Cornerstone Building Brands’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.