Pyrum Innovations AG's (OB:PYRUM) Path To Profitability

We feel now is a pretty good time to analyse Pyrum Innovations AG's (OB:PYRUM) business as it appears the company may be on the cusp of a considerable accomplishment. Pyrum Innovations AG develops, builds, and operates recycling plants for used tires worldwide. With the latest financial year loss of €7.8m and a trailing-twelve-month loss of €8.7m, the kr1.3b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Pyrum Innovations' 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 Pyrum Innovations

Consensus from 2 of the Norwegian Commercial Services analysts is that Pyrum Innovations is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of €3.0m in 2024. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 89% is expected, which is rather optimistic! 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 Pyrum Innovations' upcoming projects, but, bear in mind that generally 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 issue worth mentioning. Pyrum Innovations currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Pyrum Innovations' case is 44%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Pyrum Innovations 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 Pyrum Innovations, take a look at Pyrum Innovations' company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

1. Valuation: What is Pyrum Innovations 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 Pyrum Innovations 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 Pyrum Innovations’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.