Analysts Expect Breakeven For OrganoClick AB (publ) (STO:ORGC) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at OrganoClick AB (publ)'s (STO:ORGC) future prospects. OrganoClick AB (publ), a material and chemical technology company, develops, produces, and markets fiber-based materials and chemicals in Sweden. The company’s loss has recently broadened since it announced a kr20m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr23m, moving it further away from breakeven. Many investors are wondering about the rate at which OrganoClick 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 OrganoClick

Expectations from some of the Swedish Chemicals analysts is that OrganoClick is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of kr22m in 2022. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 114% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for OrganoClick given that this is a high-level summary, however, take into account that typically 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 18% 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:

This article is not intended to be a comprehensive analysis on OrganoClick, so if you are interested in understanding the company at a deeper level, take a look at OrganoClick's company page on Simply Wall St. We've also compiled a list of important factors you should further research:

1. Valuation: What is OrganoClick 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 OrganoClick 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 OrganoClick’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.

When trading OrganoClick or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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