Aino Health AB (publ)'s (STO:AINO) Path To Profitability

We feel now is a pretty good time to analyse Aino Health AB (publ)'s (STO:AINO) business as it appears the company may be on the cusp of a considerable accomplishment. Aino Health AB (publ) provides corporate health management solutions for private and public organizations in Finland. The kr50m market-cap company posted a loss in its most recent financial year of kr15m and a latest trailing-twelve-month loss of kr15m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Aino Health 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 Aino Health

Aino Health is bordering on breakeven, according to some Swedish Healthcare Services analysts. They expect the company to post a final loss in 2020, before turning a profit of kr1.9m in 2021. So, the company is predicted to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 121% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Aino Health's growth isn’t the focus of this broad overview, though, bear in mind that typically a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we would like to bring into light with Aino Health is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Aino Health's case is 55%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Aino Health 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 Aino Health 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 Aino Health’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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