Humble Group AB (publ) (STO:HUMBLE): Is Breakeven Near?

We feel now is a pretty good time to analyse Humble Group AB (publ)'s (STO:HUMBLE) business as it appears the company may be on the cusp of a considerable accomplishment. Humble Group AB (publ) refines, develops, and distributes fast-moving consumer products in Sweden and internationally. On 31 December 2022, the kr2.8b market-cap company posted a loss of kr71m for its most recent financial year. Many investors are wondering about the rate at which Humble Group 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 Humble Group

Consensus from 2 of the Swedish Personal Products analysts is that Humble Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr28m in 2025. Therefore, the company is expected to breakeven roughly 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of -10%,

We're not going to go through company-specific developments for Humble Group given that this is a high-level summary, however, bear in mind that by and large periods of lower growth in the upcoming years is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Humble Group is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Humble Group's case is 62%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Humble Group 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 Humble Group 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 Humble Group’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.