We Might See A Profit From Paxman AB (publ) (STO:PAX) Soon

Paxman AB (publ) (STO:PAX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Paxman AB (publ), together with its subsidiaries, develops and sells Paxman scalp cooling system to minimize hair loss in connection with chemotherapy treatment worldwide. The kr477m market-cap company posted a loss in its most recent financial year of kr10m and a latest trailing-twelve-month loss of kr2.1m shrinking the gap between loss and breakeven. The most pressing concern for investors is Paxman's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Paxman

Paxman is bordering on breakeven, according to some Swedish Medical Equipment analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of kr13m in 2023. So, the company is predicted to breakeven approximately a year 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 98%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Paxman's growth isn’t the focus of this broad overview, though, bear in mind that generally 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 The company has managed its capital judiciously, with debt making up 14% 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:

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

1. Valuation: What is Paxman 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 Paxman 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 Paxman’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. 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.