Makheia Group Société anonyme's (EPA:ALMAK): Makheia Group Société Anonyme provides brand solutions in France. With the latest financial year loss of -€787.0k and a trailing-twelve month of -€2.3m, the €6.9m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which ALMAK will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for ALMAK’s growth and when analysts expect the company to become profitable.

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According to the industry analysts covering ALMAK, breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of €369k in 2021. ALMAK is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which ALMAK must grow year-on-year. It turns out an average annual growth rate of 93% is expected, which is rather optimistic! If this rate turns out to be too aggressive, ALMAK may become profitable much later than analysts predict.

I’m not going to go through company-specific developments for ALMAK given that this is a high-level summary, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one issue worth mentioning. ALMAK currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in ALMAK’s case is 40%. 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 ALMAK 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 ALMAK, take a look at ALMAK’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should further examine:

1. Valuation: What is ALMAK 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 ALMAK 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 Makheia Group Société anonyme’s board and the CEO’s back ground.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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