Mediclinic International plc (LON:MDC) Could Be Less Than A Year Away From Profitability

Mediclinic International plc (LON:MDC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Mediclinic International plc, together with its subsidiaries, operates private hospitals. The UK£2.2b market-cap company posted a loss in its most recent financial year of UK£320m and a latest trailing-twelve-month loss of UK£414m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Mediclinic International 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.

View our latest analysis for Mediclinic International

According to the 9 industry analysts covering Mediclinic International, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of UK£90m in 2021. The company is therefore projected to breakeven around 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 34% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Mediclinic International's growth isn’t the focus of this broad overview, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Mediclinic International currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Mediclinic International's case is 65%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Mediclinic International 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 Mediclinic International 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 Mediclinic International’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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