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With the business potentially at an important milestone, we thought we'd take a closer look at Manz AG's (ETR:M5Z) future prospects. Manz AG, together with its subsidiaries, operates as a high-tech mechanical engineering company that provides production equipment in Germany, rest of Europe, the United States, Taiwan, China, rest of Asia, and internationally. The €45m market-cap company posted a loss in its most recent financial year of €2.4m and a latest trailing-twelve-month loss of €20m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Manz's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Manz
Manz is bordering on breakeven, according to the 3 German Semiconductor analysts. They expect the company to post a final loss in 2024, before turning a profit of €1.3m in 2025. So, the company is predicted to breakeven just over a year from now. 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 is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Manz's growth isn’t the focus of this broad overview, 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 we wrap up, there’s one issue worth mentioning. Manz currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Manz's case is 72%. 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 too many aspects of Manz to cover in one brief article, but the key fundamentals for the company can all be found in one place – Manz's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:
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Valuation: What is Manz 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 Manz 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 Manz’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.
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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.