Oncoclínicas do Brasil Serviços Médicos S.A. (BVMF:ONCO3) On The Verge Of Breaking Even

By
Simply Wall St
Published
March 19, 2022
BOVESPA:ONCO3
Source: Shutterstock

We feel now is a pretty good time to analyse Oncoclínicas do Brasil Serviços Médicos S.A.'s (BVMF:ONCO3) business as it appears the company may be on the cusp of a considerable accomplishment. Oncoclínicas do Brasil Serviços Médicos S.A. The R$4.8b market-cap company posted a loss in its most recent financial year of R$39m and a latest trailing-twelve-month loss of R$84m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Oncoclínicas do Brasil Serviços Médicos' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Oncoclínicas do Brasil Serviços Médicos

Consensus from 5 of the Brazilian Healthcare analysts is that Oncoclínicas do Brasil Serviços Médicos is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of R$224m in 2022. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 55% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
BOVESPA:ONCO3 Earnings Per Share Growth March 19th 2022

We're not going to go through company-specific developments for Oncoclínicas do Brasil Serviços Médicos given that this is a high-level summary, however, take into account that generally 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 issue worth mentioning. Oncoclínicas do Brasil Serviços Médicos currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Oncoclínicas do Brasil Serviços Médicos' case is 66%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Oncoclínicas do Brasil Serviços Médicos, so if you are interested in understanding the company at a deeper level, take a look at Oncoclínicas do Brasil Serviços Médicos' company page on Simply Wall St. We've also compiled a list of important factors you should look at:

  1. Valuation: What is Oncoclínicas do Brasil Serviços Médicos 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 Oncoclínicas do Brasil Serviços Médicos 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 Oncoclínicas do Brasil Serviços Médicos’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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.