Opsens Inc.'s (TSE:OPS) Shift From Loss To Profit

Opsens Inc. (TSE:OPS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Opsens Inc. develops, manufactures, installs, and sells fiber optic sensors for interventional cardiology, fractional flow reserve (FFR), oil and gas, and industrial applications. On 31 August 2020, the CA$116m market-cap company posted a loss of CA$2.6m for its most recent financial year. The most pressing concern for investors is Opsens' path to profitability – when will it 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 Opsens

Consensus from 4 of the Canadian Medical Equipment analysts is that Opsens is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of CA$4.1m in 2022. Therefore, the company is expected to breakeven roughly 2 years from now. 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 134% is expected, which is extremely buoyant. 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 Opsens' upcoming projects, however, take into account 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 issue worth mentioning. Opsens currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Opsens' case is 53%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Opsens to cover in one brief article, but the key fundamentals for the company can all be found in one place – Opsens' company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Valuation: What is Opsens 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 Opsens 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 Opsens’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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