Breakeven On The Horizon For Martela Oyj (HEL:MARAS)

Martela Oyj (HEL:MARAS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Martela Oyj operates in the office interior industry primarily in Finland, Sweden, Norway, and internationally. With the latest financial year loss of €4.8m and a trailing-twelve-month loss of €3.7m, the €14m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Martela Oyj will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Martela Oyj

Martela Oyj is bordering on breakeven, according to some Finnish Commercial Services analysts. They expect the company to post a final loss in 2021, before turning a profit of €1.3m in 2022. The company is therefore projected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 75%, 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 Martela Oyj's growth isn’t the focus of this broad overview, however, 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 would like to bring into light with Martela Oyj is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Martela Oyj's case is 64%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Martela 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 Martela 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 Martela 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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