Intervacc AB (publ) (STO:IVACC) Is Expected To Breakeven
Intervacc AB (publ)'s (STO:IVACC): Intervacc AB (publ), a biotechnology company, engages in the research and development of veterinary vaccines using recombinant proteins for animal health. On 31 December 2019, the kr791m market-cap posted a loss of -kr27.9m for its most recent financial year. Many investors are wondering the rate at which IVACC 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 IVACC.
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According to the industry analysts covering IVACC, breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of kr1.0m in 2021. Therefore, IVACC is expected to breakeven roughly a few months from now. In order to meet this breakeven date, I calculated the rate at which IVACC must grow year-on-year. It turns out an average annual growth rate of 97% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for IVACC given that this is a high-level summary, but, take into account that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one aspect worth mentioning. IVACC has managed its capital judiciously, with debt making up 0.2% of equity. This means that IVACC 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:
There are too many aspects of IVACC to cover in one brief article, but the key fundamentals for the company can all be found in one place – IVACC’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further research:
Valuation: What is IVACC 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 IVACC 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 Intervacc’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.
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