When Can We Expect A Profit From Minesto AB (publ) (STO:MINEST)?

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) operates as a marine energy technology developer in Sweden, Wales, Northern Ireland, and Taiwan. With the latest financial year loss of kr100m and a trailing-twelve-month loss of kr98m, the kr2.9b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Minesto's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View 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 2022, before generating positive profits of kr33m in 2023. Therefore, the company is expected to breakeven roughly 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 65% year-on-year, on average, which is extremely buoyant. 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 Minesto's upcoming projects, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, 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:

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

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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