When Will Enzymatica AB (STO:ENZY) Turn A Profit?

Enzymatica AB's (STO:ENZY): Enzymatica AB, a life science company, develops and sells medical devices for infection-related diseases in Sweden and internationally. The kr2.1b market-cap posted a loss in its most recent financial year of kr41.0m and a latest trailing-twelve-month loss of kr24.1m shrinking the gap between loss and breakeven. As path to profitability is the topic on ENZY’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for ENZY’s growth and when analysts expect the company to become profitable.

See our latest analysis for Enzymatica

According to the 2 industry analysts covering ENZY, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of kr16m in 2021. ENZY is therefore projected to breakeven around a few months from now. How fast will ENZY have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 102% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, ENZY may become profitable much later than analysts predict.

Underlying developments driving ENZY’s growth isn’t the focus of this broad overview, however, take into account 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.

Before I wrap up, there’s one aspect worth mentioning. ENZY has managed its capital prudently, with debt making up 11% of equity. This means that ENZY 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 key fundamentals of ENZY which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at ENZY, take a look at ENZY’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further examine:

1. Valuation: What is ENZY worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether ENZY is currently mispriced by the market.
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 back ground.
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. 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.
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