Breakeven Is Near for Pryme N.V. (OB:PRYME)

We feel now is a pretty good time to analyse Pryme N.V.'s (OB:PRYME) business as it appears the company may be on the cusp of a considerable accomplishment. Pryme N.V., a cleantech company, engages in the recycling of plastic waste and converting such waste into pyrolysis oil on an industrial scale. The kr494m market-cap company posted a loss in its most recent financial year of €4.5m and a latest trailing-twelve-month loss of €6.9m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Pryme will turn a profit, with the big question being “when will the company 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 Pryme

Pryme is bordering on breakeven, according to some Norwegian Commercial Services analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of €5.8m in 2024. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 141% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Pryme's growth isn’t the focus of this broad overview, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 9.5% 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 Pryme 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 Pryme, take a look at Pryme's company page on Simply Wall St. We've also put together a list of key factors you should further examine:

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