ImpediMed Limited's (ASX:IPD) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at ImpediMed Limited's (ASX:IPD) future prospects. ImpediMed Limited, a medical technology company, develops, manufactures, and sells bioimpedance spectroscopy (BIS) devices and software services in Australia, North America, and internationally. The AU$97m market-cap company announced a latest loss of AU$20m on 30 June 2024 for its most recent financial year result. 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

ImpediMed is bordering on breakeven, according to the 3 Australian Medical Equipment analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of AU$24m in 2027. Therefore, the company is expected to breakeven roughly 3 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 83%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving ImpediMed's growth isn’t the focus of this broad overview, but, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

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:

There are too many aspects of ImpediMed to cover in one brief article, but the key fundamentals for the company can all be found in one place – ImpediMed's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

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. 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.