Plant Advanced Technologies SA (EPA:ALPAT) Is Expected To Breakeven In The Near Future

Plant Advanced Technologies SA (EPA:ALPAT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Plant Advanced Technologies SA, a plant biotechnology company, produces and sells actives for cosmetic, pharmaceutical, and agrochemical markets in France. The €12m market-cap company announced a latest loss of €849k on 31 December 2022 for its most recent financial year result. The most pressing concern for investors is Plant Advanced Technologies' 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.

View our latest analysis for Plant Advanced Technologies

Expectations from some of the French Biotechs analysts is that Plant Advanced Technologies is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of €700k in 2025. 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 93%, 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 Plant Advanced Technologies' growth isn’t the focus of this broad overview, but, bear in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Plant Advanced Technologies currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Plant Advanced Technologies' case is 86%. 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 Plant Advanced Technologies, so if you are interested in understanding the company at a deeper level, take a look at Plant Advanced Technologies' company page on Simply Wall St. We've also put together a list of essential factors you should look at:

1. Valuation: What is Plant Advanced Technologies 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 Plant Advanced Technologies 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 Plant Advanced Technologies’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.

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

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.