When Will GomSpace Group AB (publ) (STO:GOMX) Become Profitable?

By
Simply Wall St
Published
December 15, 2021
OM:GOMX
Source: Shutterstock

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 kr559m market-cap company’s loss lessened since it announced a kr44m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr35m, as it approaches breakeven. Many investors are wondering about the rate at which GomSpace Group will turn a profit, with the big question being “when will the company 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 GomSpace Group

According to the 2 industry analysts covering GomSpace Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of kr7.2m in 2022. So, the company is predicted to breakeven just over a year from now. 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 128% 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.

earnings-per-share-growth
OM:GOMX Earnings Per Share Growth December 15th 2021

Given this is a high-level overview, we won’t go into details of GomSpace Group's upcoming projects, though, bear 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, 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 key fundamentals of GomSpace Group 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 GomSpace Group, take a look at GomSpace Group's company page on Simply Wall St. We've also put together a list of key aspects 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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