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Universal Biosensors, Inc. (ASX:UBI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Universal Biosensors, Inc., through its subsidiary, Universal Biosensors Pty Ltd, operates as a biosensors company primarily in Australia. On 31 December 2021, the AU$150m market-cap company posted a loss of AU$11m for its most recent financial year. Many investors are wondering about the rate at which Universal Biosensors will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to some industry analysts covering Universal Biosensors, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of AU$6.5m in 2024. So, the company is predicted to breakeven approximately 2 years from now. 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 85%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Universal Biosensors' upcoming projects, 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.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 0.2% 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.
There are key fundamentals of Universal Biosensors 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 Universal Biosensors, take a look at Universal Biosensors' company page on Simply Wall St. We've also put together a list of essential aspects you should look at:
Valuation: What is Universal Biosensors 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 Universal Biosensors is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Universal Biosensors’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.
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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.