When Will Nova Eye Medical Limited (ASX:EYE) Become Profitable?

We feel now is a pretty good time to analyse Nova Eye Medical Limited's (ASX:EYE) business as it appears the company may be on the cusp of a considerable accomplishment. Nova Eye Medical Limited designs, develops, manufactures, markets, and sells surgical devices for the treatment of glaucoma in Australia, the United States, Europe, the Asia Pacific, and internationally. The AU$42m market-cap company announced a latest loss of AU$8.8m on 30 June 2024 for its most recent financial year result. Many investors are wondering about the rate at which Nova Eye Medical 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.

Check out our latest analysis for Nova Eye Medical

Consensus from 2 of the Australian Medical Equipment analysts is that Nova Eye Medical is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of AU$1.2m in 2026. 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 102% 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.

Underlying developments driving Nova Eye Medical's growth isn’t the focus of this broad overview, but, 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. Nova Eye Medical currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high 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 Nova Eye Medical to cover in one brief article, but the key fundamentals for the company can all be found in one place – Nova Eye Medical's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Valuation: What is Nova Eye Medical 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 Nova Eye Medical 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 Nova Eye Medical’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.