Home Debt obligation When will Ferroamp Elektronik AB (publ) (STO: FERRO) become profitable?

When will Ferroamp Elektronik AB (publ) (STO: FERRO) become profitable?

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With the company potentially at an important milestone, we thought we would take a closer look Ferroamp Elektronik AB (publ) ‘s (STO: FERRO) future prospects. Ferroamp Elektronik AB (publ) provides energy and energy optimization solutions for homes, real estate and industries in Sweden. Market-capitalized company kr1.1b recorded a loss of 33 million kr in its last financial year and a last loss of 35 million kr over twelve consecutive months, resulting in an even larger gap between the loss and the threshold of profitability. The most pressing concern for investors is Ferroamp Elektronik’s path to profitability – when will it break even? We’ve put together a brief rundown of industry analysts’ expectations for the company, its breakeven year, and its implied growth rate.

Check out our latest review for Ferroamp Elektronik

Ferroamp Elektronik is close to breaking even, some Swedish electricity analysts say. They predict that the company will suffer a final loss in 2021, before generating positive profits of CKR 5.0 million in 2022. Therefore, the company is expected to break even in just over a year from today. How fast will the company have to grow from one year to the next to reach equilibrium on that date? Using a line of best fit, we calculated an average annual growth rate of 109%, indicating a high level of analyst confidence. If the business grows at a slower pace, it will become profitable later than expected.

OM: FERRO Growth in earnings per share November 10, 2021

Since this is a high level overview, we will not go into details of upcoming Ferroamp Elektronik projects, but keep in mind that a high predicted growth rate is usually not not unusual for a company that is currently going through a period of investment.

One thing we would like to point out is that the company has managed its capital prudently, with debt accounting for 5.1% of equity. This means that it has primarily funded its operations from equity and its low debt reduces the risk of investing in the loss-making company.

Next steps:

There are too many aspects of Ferroamp Elektronik to cover in a short article, but the fundamentals of the company can all be found in one place – the Ferroamp Elektronik company page on Simply Wall St. We also have compiled a list of the key aspects you should be looking at:

  1. Evaluation: What is Ferroamp Elektronik worth today? Has the potential for future growth already been factored into the price? The intrinsic value infographic in our free research report helps to visualize whether Ferroamp Elektronik is currently poorly valued by the market.
  2. Management team: An experienced management team at the helm increases our confidence in the company – look at who sits on the board of directors of Ferroamp Elektronik and the background of the CEO.
  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 using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.


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