Carmat SA's (EPA:ALCAR) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Carmat SA's (EPA:ALCAR) future prospects. Carmat SA designs and develops total artificial heart for people suffering from end-stage biventricular heart failure in France and internationally. The €19m market-cap company announced a latest loss of €51m on 31 December 2024 for its most recent financial year result. Many investors are wondering about the rate at which Carmat will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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Carmat is bordering on breakeven, according to the 3 French Medical Equipment analysts. They expect the company to post a final loss in 2026, before turning a profit of €7.0m in 2027. The company is therefore projected to breakeven around 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 68% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Carmat's growth isn’t the focus of this broad overview, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for Carmat

One thing we would like to bring into light with Carmat is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on Carmat, so if you are interested in understanding the company at a deeper level, take a look at Carmat's company page on Simply Wall St. We've also put together a list of essential aspects you should further research:

1. Historical Track Record: What has Carmat'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 Carmat'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.