When Will Ovaro Kiinteistösijoitus Oyj (HEL:OVARO) Breakeven?

We feel now is a pretty good time to analyse Ovaro Kiinteistösijoitus Oyj's (HEL:OVARO) business as it appears the company may be on the cusp of a considerable accomplishment. Ovaro Kiinteistösijoitus Oyj invests in rental apartments in Finland. With the latest financial year loss of €6.4m and a trailing-twelve-month loss of €6.5m, the €38m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Ovaro Kiinteistösijoitus Oyj will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Ovaro Kiinteistösijoitus Oyj

According to some industry analysts covering Ovaro Kiinteistösijoitus Oyj, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of €800k in 2022. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 93% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Ovaro Kiinteistösijoitus Oyj's growth isn’t the focus of this broad overview, however, bear in mind that typically 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 Ovaro Kiinteistösijoitus Oyj is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Ovaro Kiinteistösijoitus Oyj's case is 78%. 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 Ovaro Kiinteistösijoitus Oyj, so if you are interested in understanding the company at a deeper level, take a look at Ovaro Kiinteistösijoitus Oyj's company page on Simply Wall St. We've also put together a list of key aspects you should look at:

1. Historical Track Record: What has Ovaro Kiinteistösijoitus Oyj's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ovaro Kiinteistösijoitus 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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