Ortoma AB (publ) (STO:ORT B) About To Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at Ortoma AB (publ)'s (STO:ORT B) future prospects. Ortoma AB (publ) provides orthopedic surgical products for use in joint implant surgery in Sweden. With the latest financial year loss of kr22m and a trailing-twelve-month loss of kr31m, the kr351m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Ortoma's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Ortoma

Expectations from some of the Swedish Medical Equipment analysts is that Ortoma is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of kr18m in 2024. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 68%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Ortoma's upcoming projects, but, 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.

One thing we’d like to point out is that Ortoma has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Ortoma 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 Ortoma, take a look at Ortoma's company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Historical Track Record: What has Ortoma'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 Ortoma'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