With the business potentially at an important milestone, we thought we'd take a closer look at BRAIN Biotech AG's (ETR:BNN) future prospects. BRAIN Biotech AG researches, develops, produces, and markets enzymes, biocatalysts, microorganisms, and bioactive natural substances for chemical industries in Germany, the United States, France, the Netherlands, and the United Kingdom. The company’s loss has recently broadened since it announced a €5.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of €8.2m, moving it further away from breakeven. Many investors are wondering about the rate at which BRAIN Biotech 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.
Check out our latest analysis for BRAIN Biotech
BRAIN Biotech is bordering on breakeven, according to the 4 German Chemicals analysts. They expect the company to post a final loss in 2024, before turning a profit of €5.1m in 2025. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 71% year-on-year, on average, which is rather optimistic! 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 BRAIN Biotech's upcoming projects, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. BRAIN Biotech currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of BRAIN Biotech which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at BRAIN Biotech, take a look at BRAIN Biotech's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:
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Historical Track Record: What has BRAIN Biotech'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.
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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 BRAIN Biotech's board and the CEO’s background.
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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.