4DMedical Limited (ASX:4DX): When Will It Breakeven?

4DMedical Limited (ASX:4DX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. 4DMedical Limited operates as a medical technology company in Australia and the United States. The AU$278m market-cap company announced a latest loss of AU$31m on 30 June 2023 for its most recent financial year result. The most pressing concern for investors is 4DMedical's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for 4DMedical

4DMedical is bordering on breakeven, according to the 2 Australian Healthcare Services analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$2.6m in 2026. So, the company is predicted to breakeven approximately 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 56% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving 4DMedical's growth isn’t the focus of this broad overview, however, bear 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.

One thing we’d like to point out is that 4DMedical has no debt on its balance sheet, which is quite unusual for a cash-burning healthcare tech company, which usually has a high level of 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 too many aspects of 4DMedical to cover in one brief article, but the key fundamentals for the company can all be found in one place – 4DMedical's company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

1. Valuation: What is 4DMedical 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 4DMedical 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 4DMedical’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.

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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.