Goodtech ASA (OB:GOD) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse Goodtech ASA's (OB:GOD) business as it appears the company may be on the cusp of a considerable accomplishment. Goodtech ASA operates as an automation, power, and industrial engineering company in Norway, Sweden, Finland, Europe, and internationally. With the latest financial year loss of kr1.7m and a trailing-twelve-month loss of kr3.3m, the kr304m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Goodtech's investors mind, we've decided to gauge market sentiment. 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 Goodtech

Expectations from some of the Norwegian Machinery analysts is that Goodtech is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of kr5.0m in 2021. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 82% 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.

We're not going to go through company-specific developments for Goodtech given that this is a high-level summary, but, 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.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 13% 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 key fundamentals of Goodtech which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Goodtech, take a look at Goodtech's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

1. Valuation: What is Goodtech 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 Goodtech 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 Goodtech’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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