In This Article:
Arise AB (publ)’s (STO:ARISE): Arise AB (publ), together with its subsidiaries, operates in the onshore wind power sector in Sweden. The company’s loss has recently broadened since it announced a -kr180.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of -kr196.0m, moving it further away from breakeven. The most pressing concern for investors is ARISE’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for ARISE’s growth and when analysts expect the company to become profitable.
See our latest analysis for Arise
Expectation from Renewable Energy analysts is ARISE is on the verge of breakeven. They expect the company to post a final loss in 2018, before turning a profit of kr11.9m in 2019. ARISE is therefore projected to breakeven around a few months from now. How fast will ARISE have to grow each year in order to reach the breakeven point by 2019? Working backwards from analyst estimates, it turns out that they expect the company to grow 92.4% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, ARISE may become profitable much later than analysts predict.
Underlying developments driving ARISE’s growth isn’t the focus of this broad overview, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I would like to bring into light with ARISE is its debt-to-equity ratio of 132%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and ARISE has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of ARISE which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at ARISE, take a look at ARISE’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should further examine:
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Valuation: What is ARISE 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 ARISE is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Arise’s board and the CEO’s back ground.
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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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.