We Might See A Profit From Mediclinic International plc (LON:MDC) Soon

We feel now is a pretty good time to analyse Mediclinic International plc's (LON:MDC) business as it appears the company may be on the cusp of a considerable accomplishment. Mediclinic International plc, together with its subsidiaries, operates private hospitals. With the latest financial year loss of UK£320m and a trailing-twelve-month loss of UK£414m, the UK£2.1b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Mediclinic International's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Mediclinic International

Consensus from 9 of the British Healthcare analysts is that Mediclinic International is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of UK£90m in 2021. The company is therefore projected to breakeven around 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 29%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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We're not going to go through company-specific developments for Mediclinic International given that this is a high-level summary, though, bear in mind that typically 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 issue worth mentioning. Mediclinic International currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Mediclinic International's case is 65%. 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 too many aspects of Mediclinic International to cover in one brief article, but the key fundamentals for the company can all be found in one place – Mediclinic International's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Valuation: What is Mediclinic International 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 Mediclinic International 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 Mediclinic International’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.

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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