Analysts Expect Breakeven For Cantargia AB (publ) (STO:CANTA) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Cantargia AB (publ)'s (STO:CANTA) future prospects. Cantargia AB (publ), a biotechnology company, engages in the research and development of antibody-based treatments for life threatening diseases. The kr692m market-cap company’s loss lessened since it announced a kr372m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr330m, as it approaches breakeven. As path to profitability is the topic on Cantargia'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.

Check out our latest analysis for Cantargia

Consensus from 3 of the Swedish Biotechs analysts is that Cantargia is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of kr520m in 2024. 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 84%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Cantargia's upcoming projects, though, keep in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that Cantargia has no debt on its balance sheet, which is quite unusual for a cash-burning 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 Cantargia 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 Cantargia, take a look at Cantargia's company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:

1. Historical Track Record: What has Cantargia'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 Cantargia'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.