Kyoto Group AS (OB:KYOTO): When Will It Breakeven?

Kyoto Group AS (OB:KYOTO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kyoto Group AS provides thermal batteries for industrial applications in Norway and Denmark. On 31 December 2023, the kr263m market-cap company posted a loss of €7.3m for its most recent financial year. As path to profitability is the topic on Kyoto Group'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.

Check out our latest analysis for Kyoto Group

According to some industry analysts covering Kyoto Group, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of €2.0m in 2025. 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 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 113% year-on-year, on average, which is rather optimistic! 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 Kyoto Group 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 1.8% 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:

This article is not intended to be a comprehensive analysis on Kyoto Group, so if you are interested in understanding the company at a deeper level, take a look at Kyoto Group's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

1. Historical Track Record: What has Kyoto Group'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 Kyoto Group'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. 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.