When Will Iconovo AB (publ) (STO:ICO) Turn A Profit?

We feel now is a pretty good time to analyse Iconovo AB (publ)'s (STO:ICO) business as it appears the company may be on the cusp of a considerable accomplishment. Iconovo AB (publ) develops and licenses inhalation devices in Sweden. On 31 December 2020, the kr440m market-cap company posted a loss of kr17m for its most recent financial year. Many investors are wondering about the rate at which Iconovo will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Iconovo

According to some industry analysts covering Iconovo, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of kr7.6m in 2022. Therefore, the company is expected to breakeven just over a year from today. 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 57% 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.

We're not going to go through company-specific developments for Iconovo 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 Iconovo has no debt on its balance sheet, which is rare for a loss-making 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:

This article is not intended to be a comprehensive analysis on Iconovo, so if you are interested in understanding the company at a deeper level, take a look at Iconovo's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:

1. Valuation: What is Iconovo 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 Iconovo 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 Iconovo’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.

If you decide to trade Iconovo, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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