BHG Group (OM:BHG) remains in the red, with losses deepening at an annualized rate of 60% over the last five years. The company’s net profit margin has not improved, but investors are eyeing an expected turnaround as earnings are forecast to increase by 28.74% per year, with the business set to reach profitability within three years. With shares trading at SEK28.34, well below an estimated fair value of SEK45.38, and revenue projected to grow faster than the Swedish market, anticipation is high for BHG’s path to profit and value realization.
See our full analysis for BHG Group.
The next section breaks down how these headline results stack up against Simply Wall St’s widely followed community narratives. You will see which stories gain support and which get tested.
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BHG’s net profit margin has not shown any improvement and remains in negative territory, even as revenue is forecast to grow at 6.2% per year, outpacing the Swedish market’s 3.9% annual pace.
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With losses deepening at an average rate of 60% a year, the prevailing market view highlights the tension between positive sales growth expectations and persistent unprofitability.
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On one hand, outpacing the Swedish sector in revenue could be seen as an advantage, especially if operational efficiency improves in the future.
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At the same time, the lack of margin improvement reinforces concerns about whether top-line gains will translate to the kind of bottom-line turnaround management projects.
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Shares trade at SEK28.34, representing a 37% discount to the DCF fair value of SEK45.38. The Price-To-Sales Ratio is 0.5x compared to sector and peer averages of 0.7x and 1.7x, respectively.
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The prevailing market view notes that trading below both intrinsic value and sector multiples heavily supports the argument that BHG is undervalued compared to its specialty retail peers.
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A Price-To-Sales Ratio far beneath industry norms provides a margin of safety for value-oriented investors.
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However, the valuation gap alone will not close unless the path to profitability becomes clearer, putting pressure on execution.
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Earnings are forecast to rise at 28.74% annually, and BHG is expected to reach profitability within three years.
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According to the prevailing market view, ambitious earnings projections set up a scenario where sustained growth could spark a significant re-rating.
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If BHG achieves profitability as predicted, investors may reward the stock with higher multiples and renewed momentum.
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Still, some will stay cautious until concrete signs of margin expansion and cost control materialize to back up these optimistic growth forecasts.
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