Market Sentiment Around Loss-Making Profound Medical Corp. (TSE:PRN)

We feel now is a pretty good time to analyse Profound Medical Corp.'s (TSE:PRN) business as it appears the company may be on the cusp of a considerable accomplishment. Profound Medical Corp., together with its subsidiaries, operates as a commercial-stage medical device company that develops and markets incision-free therapeutic systems for the image guided ablation of diseased tissue in Canada, Germany, the United States, and Finland. The company’s loss has recently broadened since it announced a US$29m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$31m, moving it further away from breakeven. Many investors are wondering about the rate at which Profound Medical 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 Profound Medical

According to the 5 industry analysts covering Profound Medical, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$9.5m in 2027. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2027? 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.

We're not going to go through company-specific developments for Profound Medical given that this is a high-level summary, but, take into account 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 The company has managed its capital judiciously, with debt making up 18% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Profound Medical, so if you are interested in understanding the company at a deeper level, 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 examine:

1. Historical Track Record: What has Profound Medical'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 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. 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.