We feel now is a pretty good time to analyse Olink Holding AB (publ)'s (NASDAQ:OLK) business as it appears the company may be on the cusp of a considerable accomplishment. Olink Holding AB (publ) provides various products and services for the academic, government, biopharmaceutical, biotechnology, service provider, and other institutions that focuses on life science research. The company's loss has recently broadened since it announced a US$13m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$19m, moving it further away from breakeven. The most pressing concern for investors is Olink Holding's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 5 industry analysts covering Olink Holding, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$6.5m in 2024. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 51%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Olink Holding given that this is a high-level summary, though, keep in mind that generally a life science company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there's one aspect worth mentioning. Olink Holding currently has no debt on its balance sheet, which is quite unusual for a cash-burning life science company, which usually has a high level of 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 Olink Holding to cover in one brief article, but the key fundamentals for the company can all be found in one place – Olink Holding's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:
- Historical Track Record: What has Olink Holding'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 Olink 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.