When Will Impact Coatings AB (publ) (STO:IMPC) Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Impact Coatings AB (publ)'s (STO:IMPC) future prospects. Impact Coatings AB (publ) engages in the development and commercialization of physical vapor deposition (PVD) surface treatment solutions in Sweden. On 31 December 2023, the kr364m market-cap company posted a loss of kr32m for its most recent financial year. Many investors are wondering about the rate at which Impact Coatings will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Impact Coatings

Expectations from some of the Swedish Machinery analysts is that Impact Coatings is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr9.0m in 2026. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 70%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Impact Coatings given that this is a high-level summary, however, keep in mind that typically 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 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. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Impact Coatings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Impact Coatings' company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

1. Historical Track Record: What has Impact Coatings' 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 Impact Coatings' 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.