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

medondo holding AG (ETR:AMI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. medondo holding AG, provides service solutions in Germany. With the latest financial year loss of €4.3m and a trailing-twelve-month loss of €3.8m, the €8.2m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on medondo holding'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.

See our latest analysis for medondo holding

Expectations from some of the German IT analysts is that medondo holding is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of €700k in 2026. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 83% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of medondo holding's upcoming projects, though, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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 put together a list of pertinent 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.