Agfa-Gevaert NV's (EBR:AGFB) About To Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at Agfa-Gevaert NV's (EBR:AGFB) future prospects. Agfa-Gevaert NV develops, produces, and distributes various analog and digital imaging systems, and IT solutions worldwide. The €689m market-cap company announced a latest loss of €106m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on Agfa-Gevaert's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Agfa-Gevaert

According to the 2 industry analysts covering Agfa-Gevaert, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of €5.4m in 2021. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 143% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Agfa-Gevaert's upcoming projects, but, keep in mind that by and large healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up -0.3% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Agfa-Gevaert which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Agfa-Gevaert, take a look at Agfa-Gevaert's company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Valuation: What is Agfa-Gevaert worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Agfa-Gevaert is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Agfa-Gevaert’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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