Analysts Expect Breakeven For Profound Medical Corp. (TSE:PRN) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Profound Medical Corp.'s (TSE:PRN) future prospects. Profound Medical Corp., together with its subsidiaries, operates as a medical technology company that develops magnetic resonance guided ablation procedures for treatment of prostate disease, uterine fibroids, and palliative pain treatment in Canada, Germany, the United States, and Finland. On 31 December 2020, the CA$498m market-cap company posted a loss of US$22m for its most recent financial year. As path to profitability is the topic on Profound Medical's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Profound Medical

Profound Medical is bordering on breakeven, according to the 8 Canadian Medical Equipment analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$3.1m in 2023. The company is therefore projected to breakeven around 2 years from now. 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 61%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Profound Medical's upcoming projects, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Profound Medical has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of 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 key fundamentals of Profound Medical which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Profound Medical, take a look at Profound Medical's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

1. Valuation: What is Profound 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 Profound 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 Profound 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. 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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