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Universal Biosensors, Inc.'s (ASX:UBI) Profit Outlook

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. The company’s loss has recently broadened since it announced a AU$11m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$16m, moving it further away from breakeven. 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?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Universal Biosensors

Universal Biosensors is bordering on breakeven, according to the 2 Australian Medical Equipment analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$4.9m in 2024. So, the company is predicted to breakeven approximately 2 years from today. 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 91% is expected, which is rather optimistic! 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 Universal Biosensors given that this is a high-level summary, however, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 0.7% 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 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 compiled a list of relevant factors you should look at:

  1. 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.

  2. 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.

  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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