ScandiDos AB (publ)'s (STO:SDOS) Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at ScandiDos AB (publ)'s (STO:SDOS) future prospects. ScandiDos AB (publ) provides measurement systems and software designed for the QA and validation requirements of the new treatments implemented in clinics worldwide. The kr181m market-cap company posted a loss in its most recent financial year of kr13m and a latest trailing-twelve-month loss of kr5.3m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which ScandiDos 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.

See our latest analysis for ScandiDos

According to some industry analysts covering ScandiDos, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of kr8.1m in 2022. Therefore, the company is expected 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 108% 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 ScandiDos' growth isn’t the focus of this broad overview, but, keep in mind that generally 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 judiciously, with debt making up 1.3% 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 ScandiDos 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 ScandiDos, take a look at ScandiDos' company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Valuation: What is ScandiDos 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 ScandiDos 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 ScandiDos’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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