Loss-Making OrganoClick AB (publ) (STO:ORGC) Expected To Breakeven In The Medium-Term

We feel now is a pretty good time to analyse OrganoClick AB (publ)'s (STO:ORGC) business as it appears the company may be on the cusp of a considerable accomplishment. OrganoClick AB (publ), a material and chemical technology company, develops, produces, and markets fiber-based materials and chemicals in Sweden. On 31 December 2020, the kr935m market-cap company posted a loss of kr24m for its most recent financial year. Many investors are wondering about the rate at which OrganoClick will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for OrganoClick

According to some industry analysts covering OrganoClick, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of kr6.0m in 2022. Therefore, the company is expected to breakeven just over a year 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 94% 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.

Underlying developments driving OrganoClick's growth isn’t the focus of this broad overview, however, 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 15% 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 relevant aspects you should look at:

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 (at) simplywallst.com.