Breakeven On The Horizon For Olink Holding AB (publ) (NASDAQ:OLK)
With the business potentially at an important milestone, we thought we'd take a closer look at Olink Holding AB (publ)'s (NASDAQ:OLK) future prospects. Olink Holding AB (publ) provides various products and services for the academic, government, biopharmaceutical, biotechnology, service provider, and other institutions that focuses on life science research. The US$3.1b market-cap company posted a loss in its most recent financial year of US$13m and a latest trailing-twelve-month loss of US$18m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Olink Holding 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 Olink Holding
According to the 5 industry analysts covering Olink Holding, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$6.5m in 2024. The company is therefore projected to breakeven just over a year from today. 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 107% 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.
We're not going to go through company-specific developments for Olink Holding given that this is a high-level summary, but, keep in mind that by and large life science companies, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that Olink Holding has no debt on its balance sheet, which is rare for a loss-making life science company, which typically has high 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 Olink Holding 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 Olink Holding, take a look at Olink Holding's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:
Valuation: What is Olink Holding 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 Olink Holding is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Olink Holding’s board and the CEO’s background.
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.
