Nexam Chemical Holding AB (publ)'s (STO:NEXAM) Shift From Loss To Profit

We feel now is a pretty good time to analyse Nexam Chemical Holding AB (publ)'s (STO:NEXAM) business as it appears the company may be on the cusp of a considerable accomplishment. Nexam Chemical Holding AB (publ) develops solutions that enhance properties and performance of plastics in Sweden, Europe, and internationally. The kr368m market-cap company posted a loss in its most recent financial year of kr17m and a latest trailing-twelve-month loss of kr19m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Nexam Chemical Holding will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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Consensus from 2 of the Swedish Chemicals analysts is that Nexam Chemical Holding is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of kr4.0m in 2027. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 62% year-on-year, on average, which is extremely buoyant. 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 Nexam Chemical Holding's upcoming projects, though, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for Nexam Chemical Holding

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 8.1% 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 too many aspects of Nexam Chemical Holding to cover in one brief article, but the key fundamentals for the company can all be found in one place – Nexam Chemical Holding's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

1. Valuation: What is Nexam Chemical Holding 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 Nexam Chemical Holding 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 Nexam Chemical Holding’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.