Stock Analysis

When Will SLM Solutions Group AG (ETR:AM3D) Breakeven?

XTRA:AM3D
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We feel now is a pretty good time to analyse SLM Solutions Group AG's (ETR:AM3D) business as it appears the company may be on the cusp of a considerable accomplishment. SLM Solutions Group AG provides metal-based additive manufacturing technology solutions in Germany and internationally. The €366m market-cap company’s loss lessened since it announced a €30m loss in the full financial year, compared to the latest trailing-twelve-month loss of €30m, as it approaches breakeven. Many investors are wondering about the rate at which SLM Solutions Group will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for SLM Solutions Group

Expectations from some of the German Machinery analysts is that SLM Solutions Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of €5.0m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 103%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
XTRA:AM3D Earnings Per Share Growth August 18th 2021

Underlying developments driving SLM Solutions Group's growth isn’t the focus of this broad overview, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with SLM Solutions Group is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of SLM Solutions Group 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 SLM Solutions Group, take a look at SLM Solutions Group's company page on Simply Wall St. We've also put together a list of essential factors you should further research:

  1. Valuation: What is SLM Solutions Group 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 SLM Solutions Group 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 SLM Solutions Group’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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Valuation is complex, but we're helping make it simple.

Find out whether Nikon SLM Solutions is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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