Analysts Expect Breakeven For Alligator Bioscience AB (publ) (STO:ATORX) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Alligator Bioscience AB (publ)'s (STO:ATORX) future prospects. Alligator Bioscience AB (publ), a research-based biotechnology company, develops antibody-based pharmaceuticals for cancer treatment in Finland and Sweden. The kr64m market-cap company posted a loss in its most recent financial year of kr234m and a latest trailing-twelve-month loss of kr78m shrinking the gap between loss and breakeven. The most pressing concern for investors is Alligator Bioscience'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.

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According to some industry analysts covering Alligator Bioscience, breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr139m in 2026. 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 53%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Alligator Bioscience's upcoming projects, 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

See our latest analysis for Alligator Bioscience

Before we wrap up, there’s one issue worth mentioning. Alligator Bioscience 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:

This article is not intended to be a comprehensive analysis on Alligator Bioscience, so if you are interested in understanding the company at a deeper level, take a look at Alligator Bioscience's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

1. Historical Track Record: What has Alligator Bioscience'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 Alligator Bioscience'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. 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.