Market Sentiment Around Loss-Making Nexam Chemical Holding AB (publ) (STO:NEXAM)

With the business potentially at an important milestone, we thought we'd take a closer look at Nexam Chemical Holding AB (publ)'s (STO:NEXAM) future prospects. Nexam Chemical Holding AB (publ) develops solutions that enhance properties and performance of various polymers in Sweden, Europe, and internationally. The company’s loss has recently broadened since it announced a kr13m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr23m, moving it further away from breakeven. The most pressing concern for investors is Nexam Chemical Holding's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Nexam Chemical Holding

Consensus from 2 of the Swedish Chemicals analysts is that Nexam Chemical Holding is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr11m in 2025. The company is therefore projected to breakeven around 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 97%, 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 Nexam Chemical Holding's growth isn’t the focus of this broad overview, however, keep in mind 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 13% 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 too many aspects of Nexam Chemical Holding to cover in one brief article, but the key fundamentals for the company can all be found in one place – Nexam Chemical Holding's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Valuation: What is Nexam Chemical Holding 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 Nexam Chemical Holding 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 Nexam Chemical Holding’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.