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When Will ImpediMed Limited (ASX:IPD) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at ImpediMed Limited's (ASX:IPD) future prospects. ImpediMed Limited, a medical software technology company, develops, manufactures, and sells bioimpedance spectroscopy (BIS) devices and software services in Australia, North America, and internationally. The AU$111m market-cap company announced a latest loss of AU$20m on 30 June 2022 for its most recent financial year result. As path to profitability is the topic on ImpediMed's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for ImpediMed

According to the 4 industry analysts covering ImpediMed, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$8.2m in 2025. Therefore, the company is expected to breakeven roughly 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 79% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving ImpediMed's growth isn’t the focus of this broad overview, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. ImpediMed currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high 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 too many aspects of ImpediMed to cover in one brief article, but the key fundamentals for the company can all be found in one place – ImpediMed's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

  1. Valuation: What is ImpediMed 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 ImpediMed 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 ImpediMed’s board and the CEO’s background.

  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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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