With the business potentially at an important milestone, we thought we'd take a closer look at Sileon AB (publ)'s (STO:SILEON) future prospects. Sileon AB (publ) provides SaaS platform that supports businesses in Sweden. The kr89m market-cap company’s loss lessened since it announced a kr54m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr54m, as it approaches breakeven. As path to profitability is the topic on Sileon's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Sileon
According to some industry analysts covering Sileon, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of kr3.0m in 2025. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 109% year-on-year, on average, which is rather optimistic! 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 Sileon's upcoming projects, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Sileon currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Sileon, so if you are interested in understanding the company at a deeper level, take a look at Sileon's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
- Valuation: What is Sileon 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 Sileon is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Sileon’s board and the CEO’s background.
- 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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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
About OM:SILEON
Exceptional growth potential and undervalued.
