Munic S.A. (EPA:ALMUN): When Will It Breakeven?

Munic S.A. (EPA:ALMUN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. MUNIC S.A. engages in the research and development, and manufacture of devices and artificial intelligence platform for car data acquisition, processing, and distribution. On 31 December 2020, the €35m market-cap company posted a loss of €5.7m for its most recent financial year. Many investors are wondering about the rate at which Munic will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Munic

Consensus from 2 of the French Communications analysts is that Munic is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of €1.9m in 2022. The company is therefore projected to breakeven just over a year from today. 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 96% 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 Munic's upcoming projects, but, bear in mind 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’d like to point out is that The company has managed its capital prudently, with debt making up 36% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Munic 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 Munic 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 Munic’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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