LifeClean International AB (publ)'s (STO:LCLEAN) About To Shift From Loss To Profit

LifeClean International AB (publ) (STO:LCLEAN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Lifeclean International AB researches, produces, markets, and sells disinfection products in Sweden. On 31 December 2020, the kr253m market-cap company posted a loss of kr3.2m for its most recent financial year. The most pressing concern for investors is LifeClean International's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for LifeClean International

According to some industry analysts covering LifeClean International, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of kr2.0m in 2021. Therefore, the company is expected to breakeven roughly 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 88%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving LifeClean International's growth isn’t the focus of this broad overview, but, bear in mind that by and large 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 6.9% 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 LifeClean International 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 LifeClean International, take a look at LifeClean International's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

1. Historical Track Record: What has LifeClean International'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 LifeClean International'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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