We Might See A Profit From Panostaja Oyj (HEL:PNA1V) Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Panostaja Oyj's (HEL:PNA1V) future prospects. 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 €39m market-cap company announced a latest loss of €3.9m on 31 October 2020 for its most recent financial year result. As path to profitability is the topic on Panostaja 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 Panostaja Oyj

According to some industry analysts covering Panostaja Oyj, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of €600k in 2021. 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 67%, which is extremely buoyant. 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, though, take into account 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. Panostaja Oyj currently has a debt-to-equity ratio of 105%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in 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 important factors you should further examine:

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.

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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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