Yahoo Finance Medibio Limited (ASX:MEB): When Will It Breakeven?
With the business potentially at an important milestone, we thought we'd take a closer look at Medibio Limited's (ASX:MEB) future prospects. Medibio Limited, a health technology company, researches, develops, and commercializes mental health technology to assist in the screening, diagnosing, monitoring, and management of depression and other mental health conditions in Australia and the United States. The AU$13m market-cap company posted a loss in its most recent financial year of AU$3.9m and a latest trailing-twelve-month loss of AU$2.2m shrinking the gap between loss and breakeven. The most pressing concern for investors is Medibio's path to profitability – when will it breakeven? 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 Medibio
Medibio is bordering on breakeven, according to some Australian Healthcare Services analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$100k in 2023. Therefore, the company is expected to breakeven roughly 2 years from today. 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 75%, which signals high confidence from analysts. 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 Medibio given that this is a high-level summary, though, keep in mind that generally healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up -0.3% of equity. This means that it 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 Medibio to cover in one brief article, but the key fundamentals for the company can all be found in one place – Medibio's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:
Historical Track Record: What has Medibio'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 Medibio'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.
This article by Simply Wall St is general in nature. 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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