MAX Automation SE (ETR:MXHN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. MAX Automation SE, together with its subsidiaries, provides industrial automation and environmental technology solutions in Germany, rest of the European Union, North America, China, and internationally. The €138m market-cap company announced a latest loss of €26m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on MAX Automation's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for MAX Automation
MAX Automation is bordering on breakeven, according to the 3 German Machinery analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of €1.7m in 2021. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 104%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving MAX Automation's growth isn’t the focus of this broad overview, however, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. MAX Automation currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on MAX Automation, so if you are interested in understanding the company at a deeper level, take a look at MAX Automation's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:
- Valuation: What is MAX Automation 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 MAX Automation is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on MAX Automation’s board and the CEO’s background.
- 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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About XTRA:MXHN
MAX Automation
Engages in the provision of automation solutions for the automotive, electrical, recycling, raw materials recycling, packaging, and medical technology industries in Germany, rest of the European Union, North America, China, and internationally.
Adequate balance sheet and fair value.