When Can We Expect A Profit From Cyclopharm Limited (ASX:CYC)?

Cyclopharm Limited (ASX:CYC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Cyclopharm Limited manufacture and sells medical equipment and radiopharmaceuticals in the Asia Pacific, Europe, Canada, and internationally. The company’s loss has recently broadened since it announced a AU$4.7m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$9.3m, moving it further away from breakeven. As path to profitability is the topic on Cyclopharm's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Cyclopharm

Expectations from some of the Australian Medical Equipment analysts is that Cyclopharm is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$11m in 2026. The company is therefore projected to breakeven just over a year 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 105% is expected, which signals high confidence from analysts. 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 Cyclopharm given that this is a high-level summary, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. Cyclopharm currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Cyclopharm 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 Cyclopharm 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 Cyclopharm’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.