Market Sentiment Around Loss-Making Ngenic AB (publ) (STO:NGENIC)

With the business potentially at an important milestone, we thought we'd take a closer look at Ngenic AB (publ)'s (STO:NGENIC) future prospects. Ngenic AB (publ) provides digitalized energy services for consumers, property owners, and energy companies in Sweden. The kr79m market-cap company posted a loss in its most recent financial year of kr26m and a latest trailing-twelve-month loss of kr25m shrinking the gap between loss and breakeven. The most pressing concern for investors is Ngenic's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Ngenic

Expectations from some of the Swedish Electronic analysts is that Ngenic is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr10m in 2025. So, the company is predicted 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 116% is expected, 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 Ngenic given that this is a high-level summary, but, take into account 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. Ngenic currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Ngenic's case is 94%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Ngenic 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 Ngenic, take a look at Ngenic's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

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