Loss-Making Spago Nanomedical AB (publ) (NGM:SPAG) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Spago Nanomedical AB (publ)'s (NGM:SPAG) future prospects. Spago Nanomedical AB (publ) develops nanomaterials for cancer diagnostics and treatment. With the latest financial year loss of kr20m and a trailing-twelve-month loss of kr20m, the kr250m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Spago Nanomedical's investors mind, we've decided to gauge market sentiment. 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 Spago Nanomedical

Expectations from some of the Swedish Biotechs analysts is that Spago Nanomedical is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of kr38m in 2021. Therefore, the company is expected 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 -15%,

We're not going to go through company-specific developments for Spago Nanomedical given that this is a high-level summary, however, bear in mind that by and large a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means that a low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that Spago Nanomedical has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Historical Track Record: What has Spago Nanomedical's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Spago Nanomedical'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.

If you’re looking to trade Spago Nanomedical, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade 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.