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

With the business potentially at an important milestone, we thought we'd take a closer look at Minesto AB (publ)'s (STO:MINEST) future prospects. Minesto AB (publ), together with its subsidiaries, operates as a marine energy developer in Sweden, Wales, the Faroe Islands, Northern Ireland, and Taiwan. The kr616m market-cap company posted a loss in its most recent financial year of kr27m and a latest trailing-twelve-month loss of kr33m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Minesto will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Minesto

According to some industry analysts covering Minesto, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr55m in 2025. 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 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 146% 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, though, bear 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 Minesto has no debt on its balance sheet, which is quite unusual for a cash-burning 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 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 compiled a list of essential factors you should further examine:

1. Historical Track Record: What has Minesto'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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com