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When Will Oventus Medical Limited (ASX:OVN) Breakeven?

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·3-min read
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We feel now is a pretty good time to analyse Oventus Medical Limited's (ASX:OVN) business as it appears the company may be on the cusp of a considerable accomplishment. Oventus Medical Limited, a medical device company, develops and commercializes oral appliances for the treatment of obstructive sleep apnoea (OSA) and snoring in Australia, Canada, and the United States. On 30 June 2020, the AU$34m market-cap company posted a loss of AU$10m for its most recent financial year. The most pressing concern for investors is Oventus Medical'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.

See our latest analysis for Oventus Medical

According to some industry analysts covering Oventus Medical, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$3.7m in 2023. The company is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 61% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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

We're not going to go through company-specific developments for Oventus Medical given that this is a high-level summary, however, take into account that generally 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. Oventus Medical currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high 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 key fundamentals of Oventus Medical which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Oventus Medical, take a look at Oventus Medical's company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:

  1. Historical Track Record: What has Oventus Medical'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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Oventus Medical'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.

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

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