When Will Gigasun AB (publ) (STO:GIGA) Become Profitable?

With the business potentially at an important milestone, we thought we'd take a closer look at Gigasun AB (publ)'s (STO:GIGA) future prospects. Gigasun AB (publ), engages in the financing, owning, and operating of roof-mounted solar energy installations in China. The company’s loss has recently broadened since it announced a kr33m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr34m, moving it further away from breakeven. The most pressing concern for investors is Gigasun'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.

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Expectations from some of the Swedish Renewable Energy analysts is that Gigasun is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr24m in 2026. 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 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 105% year-on-year, on average, which is extremely buoyant. 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 Gigasun given that this is a high-level summary, but, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

View our latest analysis for Gigasun

One thing we would like to bring into light with Gigasun is its 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 Gigasun, so if you are interested in understanding the company at a deeper level, take a look at Gigasun's company page on Simply Wall St. We've also put together a list of essential factors you should look at:

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