Impact Coatings AB (publ) (STO:IMPC): Are Analysts Optimistic?

We feel now is a pretty good time to analyse Impact Coatings AB (publ)'s (STO:IMPC) business as it appears the company may be on the cusp of a considerable accomplishment. Impact Coatings AB (publ) develops and commercializes physical vapor deposition (PVD) surface treatment solutions in worldwide. The kr1.4b market-cap company announced a latest loss of kr23m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Impact Coatings' 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.

See our latest analysis for Impact Coatings

According to some industry analysts covering Impact Coatings, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of kr17m in 2023. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 81% year-on-year, on average, which signals high confidence from analysts. 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 Impact Coatings' upcoming projects, however, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Impact Coatings has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Valuation: What is Impact Coatings 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 Impact Coatings 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 Impact Coatings’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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