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Efore Oyj’s (HLSE:EFO1V): Efore Oyj develops and produces power products for the telecom, industrial, medical, lighting, utility, and military industries worldwide. On 31 December 2017, the €19.76M market-cap posted a loss of -€579.00K for its most recent financial year. Many investors are wondering the rate at which EFO1V will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for EFO1V’s growth and when analysts expect the company to become profitable.
View our latest analysis for Efore Oyj
According to the industry analysts covering EFO1V, breakeven is near. They anticipate the company to incur a final loss in 2017, before generating positive profits of €200.00K in 2018. EFO1V is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which EFO1V must grow year-on-year. It turns out an average annual growth rate of 82.47% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for EFO1V given that this is a high-level summary, however, 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.
One thing I would like to bring into light with EFO1V is its debt-to-equity ratio of 179.97%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and EFO1V has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of EFO1V 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 EFO1V, take a look at EFO1V’s company page on Simply Wall St. I’ve also compiled a list of essential factors you should further research:
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Valuation: What is EFO1V 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 EFO1V 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 Efore Oyj’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 pass 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.