Meriaura Group Oyj (STO:MERIS) Is Expected To Breakeven In The Near Future

We feel now is a pretty good time to analyse Meriaura Group Oyj's (STO:MERIS) business as it appears the company may be on the cusp of a considerable accomplishment. Meriaura Group Oyj, together with its subsidiaries, designs and delivers solar thermal systems in Europe and internationally. The kr417m market-cap company’s loss lessened since it announced a €4.1m loss in the full financial year, compared to the latest trailing-twelve-month loss of €2.1m, as it approaches breakeven. As path to profitability is the topic on Meriaura Group Oyj's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Meriaura Group Oyj

Expectations from some of the Swedish Electrical analysts is that Meriaura Group Oyj is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of €600k in 2024. The company is therefore projected 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 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 85% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Meriaura Group Oyj's upcoming projects, but, keep 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.

One thing we would like to bring into light with Meriaura Group Oyj is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Meriaura Group Oyj's case is 46%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Meriaura Group Oyj 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 Meriaura Group Oyj 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 Meriaura Group Oyj’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.