Mendus AB (publ)'s (STO:IMMU) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at Mendus AB (publ)'s (STO:IMMU) future prospects. Mendus AB (publ), a biopharmaceutical company, develops immunotherapies for the treatment of tumor recurrence and established tumors. With the latest financial year loss of kr128m and a trailing-twelve-month loss of kr123m, the kr454m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Mendus will turn a profit, with the big question being “when will the company 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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Consensus from 3 of the Swedish Biotechs analysts is that Mendus is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of kr149m in 2026. The company is therefore projected 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 28% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Mendus given that this is a high-level summary, but, take into account that generally 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.

View our latest analysis for Mendus

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.1% 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 key fundamentals of Mendus 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 Mendus, take a look at Mendus' company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

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