Protech Home Medical Corp. (CVE:PTQ) Could Be Less Than A Year Away From Profitability

Protech Home Medical Corp. (CVE:PTQ) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Protech Home Medical Corp. provides in-home monitoring equipment, supplies, and services for patients in the United States. With the latest financial year loss of US$4.2m and a trailing-twelve-month loss of US$2.8m, the CA$259m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Protech Home Medical's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Protech Home Medical

Consensus from 9 of the Canadian Healthcare analysts is that Protech Home Medical is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$5.0m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 58% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Protech Home Medical's growth isn’t the focus of this broad overview, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Protech Home Medical is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Protech Home Medical's case is 65%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Protech Home Medical to cover in one brief article, but the key fundamentals for the company can all be found in one place – Protech Home Medical's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Valuation: What is Protech Home 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 Protech Home 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 Protech Home 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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