Analysts Expect Breakeven For Invacare Corporation (NYSE:IVC)

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Invacare Corporation’s (NYSE:IVC): Invacare Corporation, together with its subsidiaries, designs, manufactures, distributes, and exports medical equipment for use in home health care, retail, and extended care markets worldwide. The US$176m market-cap company’s loss lessens since it announced a -US$76.5m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$60.3m, as it approaches breakeven. As path to profitability is the topic on IVC’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for IVC, its year of breakeven and its implied growth rate.

View our latest analysis for Invacare

Consensus from the 5 Medical Equipment analysts is IVC is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$17m in 2020. Therefore, IVC is expected to breakeven roughly a few months from now. How fast will IVC have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 74% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, IVC may become profitable much later than analysts predict.

NYSE:IVC Past Future Earnings February 8th 19

I’m not going to go through company-specific developments for IVC given that this is a high-level summary, but, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I would like to bring into light with IVC is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in IVC’s case is 68%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of IVC which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at IVC, take a look at IVC’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should look at:

1. Valuation: What is IVC 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 IVC is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Invacare’s board and the CEO’s back ground.

3. 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.