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Market Sentiment Around Loss-Making Mynaric AG (FRA:M0Y)

Simply Wall St

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Mynaric AG's (FRA:M0Y): Mynaric AG provides laser communication solutions for high data rate and long-distance wireless data transmission between moving objects in Germany. On 31 December 2018, the €110m market-cap posted a loss of -€6.7m for its most recent financial year. Many investors are wondering the rate at which M0Y will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for M0Y.

See our latest analysis for Mynaric

M0Y is bordering on breakeven, according to the 2 Aerospace & Defense analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of €19m in 2021. M0Y is therefore projected to breakeven around 2 years from today. What rate will M0Y 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 95%, which signals high confidence from analysts. If this rate turns out to be too aggressive, M0Y may become profitable much later than analysts predict.

DB:M0Y Past and Future Earnings, June 19th 2019

I’m not going to go through company-specific developments for M0Y given that this is a high-level summary, though, bear in mind 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 aspect worth mentioning. M0Y currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. M0Y currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of M0Y 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 M0Y, take a look at M0Y’s company page on Simply Wall St. I’ve also compiled a list of relevant factors you should look at:

  1. Valuation: What is M0Y 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 M0Y 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 Mynaric’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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.