Desert Control AS (OB:DSRT): Is Breakeven Near?

We feel now is a pretty good time to analyse Desert Control AS' (OB:DSRT) business as it appears the company may be on the cusp of a considerable accomplishment. Desert Control AS provides climate-smart agri-tech solutions to combat desertification, soil degradation, and water scarcity in sandy soil regions in the United Arab Emirates and the United States. The kr290m market-cap company announced a latest loss of kr53m on 31 December 2024 for its most recent financial year result. Many investors are wondering about the rate at which Desert Control will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Desert Control

According to some industry analysts covering Desert Control, breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of kr5.0m in 2027. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 50%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Desert Control's growth isn’t the focus of this broad overview, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Desert Control has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Desert Control 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 Desert Control 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 Desert Control’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.