Breakeven On The Horizon For CardieX Limited (ASX:CDX)

CardieX Limited (ASX:CDX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. CardieX Limited designs, manufactures, and markets medical devices used in cardiovascular health management in the Americas, Europe, and the Asia Pacific. The AU$28m market-cap company announced a latest loss of AU$6.8m on 30 June 2024 for its most recent financial year result. The most pressing concern for investors is CardieX'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.

View our latest analysis for CardieX

CardieX is bordering on breakeven, according to some Australian Medical Equipment analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$24m in 2026. Therefore, the company is expected to breakeven roughly 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 91%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for CardieX given that this is a high-level summary, though, 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 would like to bring into light with CardieX is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in CardieX's case is 79%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on CardieX, so if you are interested in understanding the company at a deeper level, take a look at CardieX's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is CardieX 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 CardieX 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 CardieX’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.