Hexicon AB (publ) (STO:HEXI) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse Hexicon AB (publ)'s (STO:HEXI) business as it appears the company may be on the cusp of a considerable accomplishment. Hexicon AB (publ) engages in project development and technology provision in offshore floating wind projects. With the latest financial year loss of kr167m and a trailing-twelve-month loss of kr219m, the kr231m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Hexicon'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.

View our latest analysis for Hexicon

Expectations from some of the Swedish Electrical analysts is that Hexicon is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of kr56m in 2023. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 106% 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 Hexicon given that this is a high-level summary, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Hexicon is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Hexicon's case is 98%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

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