Braemar Hotels & Resorts, Inc. (NYSE: BHR): When will it be profitable?


With the company potentially at an important stage, we thought we’d take a closer look Braemar Hotels & Resorts, Inc. (NYSE: BHR) future prospects. Braemar Hotels & Resorts is a Real Estate Investment Trust (REIT) focused on investing in luxury hotels and resorts. The $471 million market cap company announced a final loss of $40 million on December 31, 2021 for its most recent fiscal year result. As the path to profitability is the subject of concern for investors in Braemar Hotels & Resorts, we decided to assess the market sentiment. In this article, we’ll discuss the company’s growth expectations and when analysts expect it to become profitable.

Discover our latest analysis for Braemar Hotels & Resorts

According to the 4 industry analysts covering Braemar Hotels & Resorts, the consensus is that the break-even point is near. They expect the business to make a terminal loss in 2022, before making a profit of US$3.3 million in 2023. The business is therefore expected to break even in just over a year to from today. In order to meet this balance date, we have calculated the rate at which the company must grow from one year to the next. It turns out that an average annual growth rate of 53% is expected, which is extremely sustained. If this rate turns out to be too aggressive, the company could become profitable much later than analysts predict.

NYSE: BHR Earnings Per Share Growth as of March 19, 2022

We are not going to review company specific developments for Braemar Hotels & Resorts as this is a high level summary, however, keep in mind that an expected rate of growth high is generally not unusual for a company that is currently undergoing a period of investment.

Before concluding, there is one issue worth mentioning. Braemar Hotels & Resorts currently has a leverage ratio above 2x. Generally, the rule of thumb is that debt should not exceed 40% of your equity, and the company has far exceeded that figure. A higher level of debt requires stricter capital management, which increases the risk associated with investing in the loss-making company.

Next steps:

This article is not intended to be a comprehensive analysis on Braemar Hotels & Resorts, so if you are interested in understanding the business on a deeper level, take a look at Braemar Hotels & Resorts’ corporate page on Simply Wall St. We’ve also compiled a list of relevant aspects you should dig deeper into:

  1. Evaluation: What is Braemar Hotels & Resorts worth today? Has future growth potential already been factored into the price? The intrinsic value infographic in our free research report visualizes whether Braemar Hotels & Resorts is currently being mispriced by the market.
  2. Management team: An experienced management team at the helm boosts our confidence in the business – take a look at who sits on the Braemar Hotels & Resorts board and the CEO’s background.
  3. Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Explore our free list of these great stocks here.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.


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