Stock Analysis

When Can We Expect A Profit From OrganoClick AB (publ) (STO:ORGC)?

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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 for treatment of wood, technical textile and nonwoven, and bio composites in Sweden. With the latest financial year loss of kr33m and a trailing-twelve-month loss of kr36m, the kr238m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is OrganoClick's path to profitability – when will it 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

OrganoClick is bordering on breakeven, according to some Swedish Chemicals analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of kr7.0m in 2024. 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 96% 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.

OM:ORGC Earnings Per Share Growth December 7th 2022

Given this is a high-level overview, we won’t go into details of OrganoClick's upcoming projects, but, keep 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 would like to bring into light with OrganoClick is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in OrganoClick's case is 48%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of OrganoClick to cover in one brief article, but the key fundamentals for the company can all be found in one place – OrganoClick'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 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.

Valuation is complex, but we're helping make it simple.

Find out whether OrganoClick is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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