Ultimovacs ASA (OB:ULTI) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse Ultimovacs ASA's (OB:ULTI) business as it appears the company may be on the cusp of a considerable accomplishment. Ultimovacs ASA, a pharmaceutical company, develops immunotherapies for cancers. With the latest financial year loss of kr165m and a trailing-twelve-month loss of kr148m, the kr4.1b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Ultimovacs 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.

Check out our latest analysis for Ultimovacs

Ultimovacs is bordering on breakeven, according to the 3 Norwegian Biotechs analysts. They expect the company to post a final loss in 2022, before turning a profit of kr358m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 29%, 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.

We're not going to go through company-specific developments for Ultimovacs given that this is a high-level summary, but, take into account that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that Ultimovacs has no debt on its balance sheet, which is rare for a loss-making biotech, 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 Ultimovacs 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 Ultimovacs, take a look at Ultimovacs' company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:

1. Historical Track Record: What has Ultimovacs' 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 Ultimovacs' 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.