medondo holding AG's (ETR:AMI) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at medondo holding AG's (ETR:AMI) future prospects. medondo holding AG, provides service solutions in Germany. The €8.2m market-cap company’s loss lessened since it announced a €4.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of €3.8m, as it approaches breakeven. Many investors are wondering about the rate at which medondo holding will turn a profit, with the big question being “when will the company breakeven?” 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 medondo holding

medondo holding is bordering on breakeven, according to some German IT analysts. They expect the company to post a final loss in 2025, before turning a profit of €700k in 2026. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 83% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving medondo holding's growth isn’t the focus of this broad overview, however, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 38% 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:

This article is not intended to be a comprehensive analysis on medondo holding, so if you are interested in understanding the company at a deeper level, take a look at medondo holding's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

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.