Moment Group AB's (STO:MOMENT) Profit Outlook

We feel now is a pretty good time to analyse Moment Group AB's (STO:MOMENT) business as it appears the company may be on the cusp of a considerable accomplishment. Moment Group AB, together with its subsidiaries, operates in the entertainment industry in Sweden, Norway, Denmark, and Germany. On 31 December 2020, the kr91m market-cap company posted a loss of kr213m for its most recent financial year. The most pressing concern for investors is Moment Group'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.

View our latest analysis for Moment Group

Expectations from some of the Swedish Entertainment analysts is that Moment Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of kr10m in 2022. 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 144%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Moment Group's growth isn’t the focus of this broad overview, though, 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 issue worth mentioning. Moment Group currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of Moment Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Moment Group, take a look at Moment Group's company page on Simply Wall St. We've also put together a list of key aspects you should look at:

1. Valuation: What is Moment Group 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 Moment Group 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 Moment Group’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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