Stock Analysis

Aker BioMarine AS' (OB:AKBM) Has Found A Path To Profitability

OB:AKBM
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Aker BioMarine AS (OB:AKBM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Aker BioMarine AS develops, produces, and sells krill-derived ingredients for nutraceutical, dietary supplement, and animal feed applications in Norway, the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The kr8.7b market-cap company announced a latest loss of US$5.5m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Aker BioMarine's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Aker BioMarine

Aker BioMarine is bordering on breakeven, according to the 3 Norwegian Food analysts. They expect the company to post a final loss in 2020, before turning a profit of US$21m in 2021. Therefore, the company is expected to breakeven roughly a year 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 51% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
OB:AKBM Earnings Per Share Growth April 13th 2021

Given this is a high-level overview, we won’t go into details of Aker BioMarine's upcoming projects, however, 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.

Before we wrap up, there’s one issue worth mentioning. Aker BioMarine currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Aker BioMarine's case is 61%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Aker BioMarine 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 Aker BioMarine, take a look at Aker BioMarine's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:

  1. Valuation: What is Aker BioMarine 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 Aker BioMarine 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 Aker BioMarine’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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