Market Sentiment Around Loss-Making Enzymatica AB (publ) (STO:ENZY)

We feel now is a pretty good time to analyse Enzymatica AB (publ)'s (STO:ENZY) business as it appears the company may be on the cusp of a considerable accomplishment. Enzymatica AB (publ), a life science company, develops and sells medical devices for infection-related diseases. The kr509m market-cap company posted a loss in its most recent financial year of kr69m and a latest trailing-twelve-month loss of kr58m shrinking the gap between loss and breakeven. The most pressing concern for investors is Enzymatica'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 Enzymatica

Expectations from some of the Swedish Pharmaceuticals analysts is that Enzymatica is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr23m in 2025. Therefore, the company is expected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 83% is expected, which signals high confidence from analysts. 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 Enzymatica's upcoming projects, though, bear in mind that by and large pharmaceuticals, 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 The company has managed its capital prudently, with debt making up 28% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Enzymatica to cover in one brief article, but the key fundamentals for the company can all be found in one place – Enzymatica's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

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