InCoax Networks AB (publ)'s (STO:INCOAX) Path To Profitability

We feel now is a pretty good time to analyse InCoax Networks AB (publ)'s (STO:INCOAX) business as it appears the company may be on the cusp of a considerable accomplishment. InCoax Networks AB (publ) provides networking products and solutions to fiber/LAN operators, internet service providers, and hospitality customers in European Union, North America, and internationally. The kr119m market-cap company posted a loss in its most recent financial year of kr23m and a latest trailing-twelve-month loss of kr15m shrinking the gap between loss and breakeven. The most pressing concern for investors is InCoax Networks' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for InCoax Networks

InCoax Networks is bordering on breakeven, according to some Swedish Communications analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr37m in 2025. The company is therefore projected to breakeven around 2 years 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 127% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for InCoax Networks given that this is a high-level summary, but, bear in mind that by and large 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 4.9% 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 InCoax Networks 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 InCoax Networks, take a look at InCoax Networks' company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Historical Track Record: What has InCoax Networks' 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 InCoax Networks' 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.