Loss-Making Azelio AB (publ) (STO:AZELIO) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Azelio AB (publ)'s (STO:AZELIO) future prospects. Azelio AB (publ) engages in the research and development, production, and supply of Stirling engine-based renewable energy systems in Sweden, the European Union, and internationally. The company’s loss has recently broadened since it announced a kr193m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr213m, moving it further away from breakeven. The most pressing concern for investors is Azelio'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 Azelio

According to the 2 industry analysts covering Azelio, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of kr82m in 2022. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 107% year-on-year, on average, which is extremely buoyant. 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 Azelio given that this is a high-level summary, though, keep in mind that typically 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. The company has managed its capital prudently, with debt making up 1.8% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

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