Robit Oyj (HEL:ROBIT) Could Be Less Than A Year Away From Profitability

Robit Oyj (HEL:ROBIT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Robit Oyj manufactures and sells drilling consumables for applications in mining, quarrying, construction, and well drilling industries. The €103m market-cap company announced a latest loss of €2.9m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on Robit Oyj's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Robit Oyj

According to some industry analysts covering Robit Oyj, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of €2.0m in 2021. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 78% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Robit Oyj's growth isn’t the focus of this broad overview, however, keep 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.

Before we wrap up, there’s one issue worth mentioning. Robit Oyj currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Robit Oyj's case is 61%. 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 Robit Oyj, so if you are interested in understanding the company at a deeper level, take a look at Robit Oyj's company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:

1. Valuation: What is Robit Oyj 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 Robit Oyj 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 Robit Oyj’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. 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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