We Might See A Profit From Ferronordic AB (publ) (STO:FNM) Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Ferronordic AB (publ)'s (STO:FNM) future prospects. Ferronordic AB (publ), together with its subsidiaries, operates as a dealer for new and used construction equipment and trucks in the United States, Germany, and Kazakhstan. With the latest financial year loss of kr199m and a trailing-twelve-month loss of kr17m, the kr953m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Ferronordic's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

According to the 2 industry analysts covering Ferronordic, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of kr82m in 2026. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 64% is expected, 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 Ferronordic given that this is a high-level summary, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

See our latest analysis for Ferronordic

One thing we would like to bring into light with Ferronordic is its debt-to-equity ratio of 146%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Ferronordic 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 Ferronordic is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ferronordic’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.

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.