Nexam Chemical Holding AB (publ) (STO:NEXAM): Are Analysts Optimistic?

Nexam Chemical Holding AB (publ) (STO:NEXAM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Nexam Chemical Holding AB (publ) develops solutions that enhance properties and performance of various types of polymers. The kr697m market-cap company’s loss lessened since it announced a kr17m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr11m, as it approaches 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 2020, before generating positive profits of kr4.5m in 2021. So, the company is predicted to breakeven just over a year from now. 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 64%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Nexam Chemical Holding's upcoming projects, however, take into account 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 20% 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 put together a list of pertinent aspects you should further research:

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. 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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