Brainsway Ltd. (TLV:BWAY): Is Breakeven Near?

Brainsway Ltd. (TLV:BWAY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Brainsway Ltd., a commercial stage medical device company, focuses on the development and sale of non-invasive neuromodulation products in Israel and internationally. The ₪221m market-cap company posted a loss in its most recent financial year of US$10m and a latest trailing-twelve-month loss of US$7.3m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Brainsway will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Brainsway

Consensus from 4 of the Israeli Medical Equipment analysts is that Brainsway is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$7.5m in 2023. The company is therefore projected to breakeven around 3 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 59% is expected, which signals high confidence from analysts. 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 Brainsway given that this is a high-level summary, though, keep in mind that typically 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 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 Brainsway, so if you are interested in understanding the company at a deeper level, take a look at Brainsway's company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:

1. Valuation: What is Brainsway 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 Brainsway 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 Brainsway’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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