Desert Control AS (OB:DSRT) Is Expected To Breakeven In The Near Future

Desert Control AS (OB:DSRT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Desert Control AS, a climate technology company, engages in reclaiming degraded soil and turning desert sand into fertile soil. With the latest financial year loss of kr32m and a trailing-twelve-month loss of kr66m, the kr622m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Desert Control's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Desert Control

According to the 2 industry analysts covering Desert Control, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of kr17m in 2024. So, the company is predicted 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 80% is expected, which signals high confidence from analysts. 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 Desert Control given that this is a high-level summary, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. Desert Control currently 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:

There are key fundamentals of Desert Control 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 Desert Control, take a look at Desert Control's company page on Simply Wall St. We've also compiled a list of key aspects you should look at:

1. Historical Track Record: What has Desert Control'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 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.