Analysts Expect Breakeven For ImpediMed Limited (ASX:IPD) Before Long

We feel now is a pretty good time to analyse ImpediMed Limited's (ASX:IPD) business as it appears the company may be on the cusp of a considerable accomplishment. ImpediMed Limited, a medical software technology company, together with its subsidiaries, develops, manufactures, and sells bioimpedance spectroscopy (BIS) devices and software services in Australia, North America, and internationally. On 30 June 2020, the AU$176m market-cap company posted a loss of AU$21m for its most recent financial year. Many investors are wondering about the rate at which ImpediMed will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for ImpediMed

According to the 3 industry analysts covering ImpediMed, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of AU$213k in 2023. The company is therefore projected to breakeven around 2 years from today. 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 54%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of ImpediMed's upcoming projects, though, bear in mind that typically 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. ImpediMed currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high 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 ImpediMed, so if you are interested in understanding the company at a deeper level, take a look at ImpediMed's company page on Simply Wall St. We've also put together a list of essential aspects you should further research:

1. Historical Track Record: What has ImpediMed's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on ImpediMed'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. 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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