We Might See A Profit From Pyramid AG (ETR:M3BK) Soon

Pyramid AG (ETR:M3BK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Pyramid AG develops and manufactures information technology solutions for the retail and hospitality market. The €27m market-cap company announced a latest loss of €3.1m on 31 December 2024 for its most recent financial year result. The most pressing concern for investors is Pyramid's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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Pyramid is bordering on breakeven, according to the 2 German Tech analysts. They expect the company to post a final loss in 2024, before turning a profit of €150k in 2025. So, the company is predicted to breakeven approximately 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 57%, which signals high confidence from analysts. 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 Pyramid given that this is a high-level summary, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for Pyramid

One thing we would like to bring into light with Pyramid is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Pyramid's case is 46%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Pyramid 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 Pyramid 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 Pyramid’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.