Minesto AB (publ)'s (STO:MINEST) Shift From Loss To Profit

Minesto AB (publ) (STO:MINEST) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Minesto AB (publ) operates as a marine energy technology developer in Sweden, Wales, Northern Ireland, and Taiwan. The kr2.9b market-cap company posted a loss in its most recent financial year of kr13m and a latest trailing-twelve-month loss of kr14m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Minesto's path to profitability – when will it breakeven? 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 Minesto

According to some industry analysts covering Minesto, breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of kr73m 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 108% 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.

We're not going to go through company-specific developments for Minesto given that this is a high-level summary, but, 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 The company has managed its capital judiciously, with debt making up 0.1% 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 Minesto 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 Minesto, take a look at Minesto's company page on Simply Wall St. We've also put together a list of essential factors you should look at:

1. Valuation: What is Minesto 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 Minesto 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 Minesto’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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