Company Overview
Brookfield Business Corporation functions as a global operator of services and industrials across the United States, Australia, Brazil, the United Kingdom, and other international markets, delivering cloud-based software as a service and technology solutions to dealerships and original equipment manufacturers. The entity operates within the Financial Services sector, specifically the Asset Management industry, which defines its role as a manager of capital and operational assets rather than a traditional manufacturing or retail firm. The company's current scale is quantified by a market capitalization of $2.25B and annual revenue totaling $7.71B, while the number of employees is listed as N/A in available data. These valuation figures, particularly the market cap relative to revenue, indicate a capital-intensive business model where the value of the firm is derived largely from the performance of its underlying assets and the efficiency of its management rather than pure volume sales growth.
Financial Health
The company reported revenue of $7.71B for the trailing twelve months, yet generated a net income of $-1,074,000,000, revealing a significant divergence between top-line activity and bottom-line profitability. This negative net income despite substantial revenue suggests a cost structure where operating expenses, potentially related to debt servicing or asset impairment, exceed the gross earnings generated from core operations. However, the company maintains an EBITDA of $840.00M and Free Cash Flow of $636.37M, indicating that it retains significant cash flow from operations even after accounting for capital expenditures and working capital needs. The financial margins further illustrate this structural dynamic, with a Gross Margin of 8.5%, an Operating Margin of 4.9%, and a negative Profit Margin of -13.9%. The gap between the positive operating margin and the negative profit margin highlights the substantial impact of interest expenses and other non-operating costs on the final earnings figure. On the liquidity front, the company holds $710.00M in cash against total debt of $7.84B, resulting in a highly leveraged balance sheet characterized by a Debt to Equity ratio of 373.88. Short-term liquidity is constrained by a Current Ratio of 0.50, which signifies that current liabilities exceed current assets, requiring careful management of cash burn and refinancing schedules. Return on Equity stands at -63.5% while Return on Assets is 1.1%, metrics that reflect the current erosion of equity value due to losses and the relatively efficient use of total assets to generate income before financing costs.
Valuation Assessment
Valuation multiples for Brookfield Business Corporation present a mixed picture, with a Trailing P/E ratio listed as N/A and a Forward P/E also marked as N/A due to the lack of positive earnings in the trailing period. The Price to Book ratio is recorded at -4.57, a negative figure that indicates the market is pricing the company below its book value, often seen in distressed or highly leveraged asset management firms where liabilities outweigh equity. Alternative valuation metrics provide different context, with a Price to Sales ratio of 0.29 and an EV/EBITDA of 14.47, suggesting the market values the company at a fraction of its sales revenue but at a moderate multiple of its cash earnings before interest, taxes, depreciation, and amortization. The stock has traded between a 52-Week High of $38.25 and a 52-Week Low of $21.52, placing the current trading price within a range that reflects significant volatility and market uncertainty regarding the company's turnaround potential. The Beta of 1.46 indicates that the stock price is significantly more volatile than the broader market, moving 46% more than the benchmark index in response to market fluctuations.
Growth & Income
Revenue growth for the year over year is negative at -24.7%, while Earnings Growth is listed as N/A due to the negative earnings baseline. This contraction in revenue suggests a challenging operating environment or specific headwinds affecting the services and industrials portfolio, whereas the absence of positive earnings growth further complicates the assessment of profitability trajectory. Regarding income distribution, the company offers a Dividend Yield of 0.8% with a Payout Ratio of 7.0%. This low payout ratio relative to the negative net income indicates that the dividend is not derived from current earnings but rather from cash flow or asset sales, making the sustainability of the payout dependent on future operational improvements rather than profitability. Consequently, the company does not reinvest earnings into growth in the traditional sense of retaining profits, as it is currently burning cash to service debt and operations. The overall growth and income profile is characterized by a decline in top-line revenue, a lack of profitable earnings, and a dividend yield that exists independently of current net income generation.