When Will Intervacc AB (publ) (STO:IVACC) Become Profitable?

Intervacc AB (publ) (STO:IVACC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Intervacc AB (publ), a biotechnology company, engages in the research and development of veterinary vaccines using recombinant proteins for animal health. The kr2.7b market-cap company’s loss lessened since it announced a kr28m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr26m, as it approaches breakeven. The most pressing concern for investors is Intervacc's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Intervacc

Consensus from 2 of the Swedish Biotechs analysts is that Intervacc is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of kr16m in 2022. Therefore, the company is expected to breakeven just over a year from today. 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 77% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Intervacc's growth isn’t the focus of this broad overview, though, keep in mind that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 0.06% 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:

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

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