Enersense International Oyj's (HEL:ESENSE) Profit Outlook

We feel now is a pretty good time to analyse Enersense International Oyj's (HEL:ESENSE) business as it appears the company may be on the cusp of a considerable accomplishment. Enersense International Oyj provides recruitment and resource management services for various industrial projects in Finland. On 31 December 2020, the €70m market-cap company posted a loss of €110k for its most recent financial year. Many investors are wondering about the rate at which Enersense International Oyj will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Enersense International Oyj

According to some industry analysts covering Enersense International Oyj, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of €3.7m in 2022. The company is therefore projected to breakeven just over a year from now. 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 57% 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.

Given this is a high-level overview, we won’t go into details of Enersense International Oyj's upcoming projects, 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 issue worth mentioning. Enersense International Oyj currently has a debt-to-equity ratio of 115%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Enersense International Oyj which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Enersense International Oyj, take a look at Enersense International Oyj's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:

1. Valuation: What is Enersense International 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 Enersense International 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 Enersense International 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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