Profound Medical Corp. (TSE:PRN) Is Expected To Breakeven In The Near Future

By
Simply Wall St
Published
January 27, 2021
TSX:PRN

Profound Medical Corp. (TSE:PRN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Profound Medical Corp. operates as a medical technology company develops magnetic resonance guided ablation procedures for treatment of prostate disease, uterine fibroids, and palliative pain treatment in Canada, Germany, and Finland. With the latest financial year loss of CA$20m and a trailing-twelve-month loss of CA$24m, the CA$670m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Profound Medical's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Profound Medical

According to the 7 industry analysts covering Profound Medical, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of CA$9.7m in 2023. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
TSX:PRN Earnings Per Share Growth January 27th 2021

Underlying developments driving Profound Medical's growth isn’t the focus of this broad overview, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

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 loss-making, growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

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 factors you should further examine:

  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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