We feel now is a pretty good time to analyse Active Biotech AB (publ)'s (STO:ACTI) business as it appears the company may be on the cusp of a considerable accomplishment. Active Biotech AB (publ), a biotechnology company, engages in the research, development, production, marketing, and sale of medical, chemical, and biotechnology products in Sweden. The kr119m market-cap company’s loss lessened since it announced a kr37m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr34m, as it approaches breakeven. Many investors are wondering about the rate at which Active Biotech will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Active Biotech is bordering on breakeven, according to some Swedish Biotechs analysts. They expect the company to post a final loss in 2026, before turning a profit of kr18m in 2027. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 108% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Active Biotech's upcoming projects, however, keep in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Check out our latest analysis for Active Biotech
One thing we’d like to point out is that Active Biotech has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which typically has high debt relative to its equity. The company 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 too many aspects of Active Biotech to cover in one brief article, but the key fundamentals for the company can all be found in one place – Active Biotech's company page on Simply Wall St. We've also put together a list of important factors you should further examine:
- Historical Track Record: What has Active Biotech's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Active Biotech'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.