Market Sentiment Around Loss-Making Panostaja Oyj (HEL:PNA1V)

We feel now is a pretty good time to analyse Panostaja Oyj's (HEL:PNA1V) business as it appears the company may be on the cusp of a considerable accomplishment. Panostaja Oyj is a private equity firm specializing in investments in expansions through corporate acquisitions, industry consolidations, and mature and middle market investments in small and medium-sized companies through acquisitions in sectors undergoing growth and restructuring. The company’s loss has recently broadened since it announced a €506k loss in the full financial year, compared to the latest trailing-twelve-month loss of €4.3m, moving it further away from breakeven. The most pressing concern for investors is Panostaja Oyj's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Panostaja Oyj

According to some industry analysts covering Panostaja Oyj, breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of €700k in 2021. The company is therefore projected to breakeven just over a year from today. 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 84%, 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 Panostaja Oyj's upcoming projects, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Panostaja 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 Panostaja Oyj's case is 64%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Panostaja Oyj to cover in one brief article, but the key fundamentals for the company can all be found in one place – Panostaja Oyj's company page on Simply Wall St. We've also put together a list of key factors you should further research:

1. Valuation: What is Panostaja 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 Panostaja 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 Panostaja 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.

If you decide to trade Panostaja Oyj, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.