Materialise NV’s (NASDAQ:MTLS): Materialise NV provides additive manufacturing software and 3D printing services in Europe, the Americas, Africa, and the Asia-Pacific. With the latest financial year loss of -€1.66M and a trailing-twelve month of -€1.02M, the US$595.35M market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on MTLS’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for MTLS, its year of breakeven and its implied growth rate.
According to the industry analysts covering MTLS, breakeven is near. They expect the company to post a final loss in 2018, before turning a profit of €1.10M in 2019. Therefore, MTLS is expected to breakeven roughly a few months from now. What rate will MTLS have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 60.84%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving MTLS’s growth isn’t the focus of this broad overview, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I would like to bring into light with MTLS is its debt-to-equity ratio of 124.01%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and MTLS 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.
There are key fundamentals of MTLS 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 MTLS, take a look at MTLS’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further research:
- Valuation: What is MTLS 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 MTLS 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 Materialise’s board and the CEO’s back ground.
- 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.