GomSpace Group AB (publ) (STO:GOMX) Is Expected To Breakeven In The Near Future

GomSpace Group AB (publ) (STO:GOMX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. GomSpace Group AB (publ), through its subsidiaries, designs, develops, integrates, and manufactures nanosatellites for the academic, defense, government, and commercial markets. The kr883m market-cap company posted a loss in its most recent financial year of kr152m and a latest trailing-twelve-month loss of kr80m shrinking the gap between loss and breakeven. As path to profitability is the topic on GomSpace Group's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for GomSpace Group

GomSpace Group is bordering on breakeven, according to the 2 Swedish Aerospace & Defense analysts. They expect the company to post a final loss in 2021, before turning a profit of kr19m in 2022. Therefore, the company is expected 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 97% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of GomSpace Group's upcoming projects, though, take into account 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 11% 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 too many aspects of GomSpace Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – GomSpace Group's company page on Simply Wall St. We've also put together a list of important factors you should further examine:

1. Valuation: What is GomSpace Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether GomSpace Group is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on GomSpace Group’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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