Breakeven On The Horizon For Arcure S.A. (EPA:ALCUR)

We feel now is a pretty good time to analyse Arcure S.A.'s (EPA:ALCUR) business as it appears the company may be on the cusp of a considerable accomplishment. Arcure S.A. develops detection solutions for enhancing the autonomy of industrial machinery worldwide. The €20m market-cap company posted a loss in its most recent financial year of €1.7m and a latest trailing-twelve-month loss of €3.0m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Arcure 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.

Check out our latest analysis for Arcure

According to some industry analysts covering Arcure, breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of €1.7m in 2023. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Arcure's upcoming projects, however, take into account that by and large 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 Arcure is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Arcure's case is 69%. 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 Arcure, so if you are interested in understanding the company at a deeper level, take a look at Arcure's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

1. Historical Track Record: What has Arcure'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 Arcure'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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