Loss-Making ES Group AB (publ) (STO:ESGR B) Expected To Breakeven In The Medium-Term

ES Group AB (publ) (STO:ESGR B) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ES Group AB (publ) develops heat pumps for commercial buildings. With the latest financial year loss of kr23m and a trailing-twelve-month loss of kr23m, the kr108m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is ES Group'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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Consensus from 2 of the Swedish Household Products analysts is that ES Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of kr6.0m in 2027. Therefore, the company is expected 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 105% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving ES Group's growth isn’t the focus of this broad overview, though, take into account 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 ES Group

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 16% 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:

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

1. Valuation: What is ES Group 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 ES Group 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 ES Group’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.