Brookfield Business Partners (BBU) has been quietly rewarding patient investors, with the stock up around 6% this month and more than 30% over the past 3 months, despite posting a modest net loss.
See our latest analysis for Brookfield Business Partners.
Zooming out, Brookfield Business Partners’ recent 7 day share price return of nearly 8% builds on strong year to date momentum. Its 3 year total shareholder return above 100% shows that patient holders have been well compensated for the risk.
If Brookfield’s move has you rethinking what else might be setting up for a rerating, now is a good time to explore fast growing stocks with high insider ownership.
With shares near record highs, a small discount to analyst targets, and a headline net loss, investors face a familiar dilemma: is Brookfield Business Partners still undervalued, or is the market already pricing in years of future growth?
On a price-to-sales basis, Brookfield Business Partners looks inexpensive at its last close of $36.25, especially given how far below peers it trades.
The price-to-sales ratio compares the company’s market value to its revenue, a useful yardstick for asset heavy and currently unprofitable businesses like Brookfield. With BBU unprofitable today, investors are effectively valuing each dollar of sales at a steep discount, which can signal skepticism about future margins or simply a mispricing.
Against the wider Global Industrials industry average of 0.8x sales and a closer peer average of 1.2x, Brookfield’s 0.3x multiple stands out as meaningfully lower. That wide gap suggests the market is either heavily discounting the sustainability or quality of its revenue base, or leaving room for a potential rerating if profitability improves.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price to Sales of 0.3x (UNDERVALUED)
However, persistent net losses and any slowdown in dealmaking or portfolio exits could challenge the market’s optimism and delay a sustained rerating.
Find out about the key risks to this Brookfield Business Partners narrative.
Our DCF model goes much further than the modest price to sales signal, suggesting Brookfield Business Partners could be worth around $891.75 per unit, versus a market price of $36.25. That points to extreme undervaluation, but the model may be overly optimistic about long term cash flows.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Brookfield Business Partners for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 909 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.
