Cinis Fertilizer AB (publ) (STO:CINIS) Could Be Less Than A Year Away From Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Cinis Fertilizer AB (publ)'s (STO:CINIS) future prospects. Cinis Fertilizer AB (publ), a green tech company, produces and sells environmentally friendly mineral fertilizers by recycling industrial waste products. The company’s loss has recently broadened since it announced a kr33m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr42m, moving it further away from breakeven. The most pressing concern for investors is Cinis Fertilizer's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Cinis Fertilizer

According to the 2 industry analysts covering Cinis Fertilizer, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of kr63m in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 53% 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 Cinis Fertilizer given that this is a high-level summary, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Cinis Fertilizer currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Cinis Fertilizer's case is 82%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Cinis Fertilizer'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 Cinis Fertilizer'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.

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