Novacyt Société Anonyme (EPA:ALNOV): Is Breakeven Near?
Novacyt Société Anonyme’s (ENXTPA:ALNOV): Novacyt Société Anonyme develops and sells diagnostic products for cancer and infectious diseases. The €25.56M market-cap company announced a latest loss of -€5.44M on 31 December 2017 for its most recent financial year result. Many investors are wondering the rate at which ALNOV will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for ALNOV, its year of breakeven and its implied growth rate.
See our latest analysis for Novacyt Société Anonyme
ALNOV is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of €700.00K in 2020. So, ALNOV is predicted to breakeven approximately 2 years from now. What rate will ALNOV 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 89.35%, which is extremely buoyant. If this rate turns out to be too aggressive, ALNOV may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of ALNOV’s upcoming projects, though, take into account that generally biotechs, depending on the stage of product development, have irregular periods of cash flow. So, 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. ALNOV has managed its capital judiciously, with debt making up 15.63% of equity. This means that ALNOV has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on ALNOV, so if you are interested in understanding the company at a deeper level, take a look at ALNOV’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further research:
Valuation: What is ALNOV 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 ALNOV 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 Novacyt Société Anonyme’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.
