When Will Azelio AB (publ) (STO:AZELIO) Become Profitable?

We feel now is a pretty good time to analyse Azelio AB (publ)'s (STO:AZELIO) business as it appears the company may be on the cusp of a considerable accomplishment. 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 kr161m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr197m, moving it further away from breakeven. The most pressing concern for investors is Azelio's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Azelio

Consensus from 2 of the Swedish Electrical analysts is that Azelio is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of kr82m in 2022. Therefore, the company is expected to breakeven just over a year from today. 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 88% 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 Azelio given that this is a high-level summary, however, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 2.8% 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:

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

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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