We Might See A Profit From Tekna Holding ASA (OB:TEKNA) Soon

We feel now is a pretty good time to analyse Tekna Holding ASA's (OB:TEKNA) business as it appears the company may be on the cusp of a considerable accomplishment. Tekna Holding ASA develops, manufactures, and sells micro and nano powders, and plasma process solutions in North America, Europe, Asia, and internationally. The kr1.0b market-cap company posted a loss in its most recent financial year of CA$22m and a latest trailing-twelve-month loss of CA$13m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Tekna Holding will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Tekna Holding

Expectations from some of the Norwegian Chemicals analysts is that Tekna Holding is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of CA$8.4m in 2024. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 192% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Tekna Holding's growth isn’t the focus of this broad overview, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Tekna Holding is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Tekna Holding's case is 56%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Tekna Holding to cover in one brief article, but the key fundamentals for the company can all be found in one place – Tekna Holding's company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:

1. Historical Track Record: What has Tekna Holding'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 Tekna Holding'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.