medondo holding AG (ETR:AMI) Has Found A Path To Profitability

We feel now is a pretty good time to analyse medondo holding AG's (ETR:AMI) business as it appears the company may be on the cusp of a considerable accomplishment. medondo holding AG, provides service solutions in Germany. The €10m market-cap company’s loss lessened since it announced a €5.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of €4.9m, as it approaches breakeven. The most pressing concern for investors is medondo holding's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for medondo holding

According to some industry analysts covering medondo holding, breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of €100k in 2024. Therefore, the company is expected to breakeven roughly a year 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 114%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for medondo holding given that this is a high-level summary, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 16% 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 too many aspects of medondo holding to cover in one brief article, but the key fundamentals for the company can all be found in one place – medondo holding's company page on Simply Wall St. We've also put together a list of key factors you should further research:

1. Valuation: What is medondo holding 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 medondo holding 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 medondo holding’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. 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.