Modus Therapeutics Holding AB (publ)'s (STO:MODTX) Shift From Loss To Profit
Modus Therapeutics Holding AB (publ) (STO:MODTX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Modus Therapeutics Holding AB (publ), a biotechnology company, develops a treatment for sepsis and septic shock in Sweden. The company’s loss has recently broadened since it announced a kr16m loss in the full financial year, compared to the latest trailing-twelve-month loss of kr18m, moving it further away from breakeven. As path to profitability is the topic on Modus Therapeutics Holding's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Expectations from some of the Swedish Biotechs analysts is that Modus Therapeutics Holding is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of kr10m in 2027. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 76%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Modus Therapeutics Holding's upcoming projects, but, bear in mind that generally 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.
View our latest analysis for Modus Therapeutics Holding
One thing we’d like to point out is that Modus Therapeutics Holding has no debt on its balance sheet, which is rare for a loss-making biotech, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Modus Therapeutics Holding which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Modus Therapeutics Holding, take a look at Modus Therapeutics Holding's company page on Simply Wall St. We've also put together a list of essential factors you should look at:
- Valuation: What is Modus Therapeutics Holding 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 Modus Therapeutics Holding 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 Modus Therapeutics Holding’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.