Amniotics AB (publ) (STO:AMNI): Is Breakeven Near?

We feel now is a pretty good time to analyse Amniotics AB (publ)'s (STO:AMNI) business as it appears the company may be on the cusp of a considerable accomplishment. Amniotics AB (publ) develops stem cell-based therapeutics to treat severe life-threatening diseases. The kr9.2m market-cap company announced a latest loss of kr31m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Amniotics' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Amniotics

Expectations from some of the Swedish Biotechs analysts is that Amniotics is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr82m in 2026. So, the company is predicted to breakeven approximately 2 years 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 85%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Amniotics' growth isn’t the focus of this broad overview, however, keep in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that Amniotics 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:

There are key fundamentals of Amniotics 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 Amniotics, take a look at Amniotics' company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Historical Track Record: What has Amniotics' 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 Amniotics' 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.