BrainsWay Ltd. (TLV:BWAY): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at BrainsWay Ltd.'s (TLV:BWAY) future prospects. Brainsway Ltd. develops and sells noninvasive neurostimulation treatments for mental health disorders in the United States, the Asia Pacific, Europe, and internationally. With the latest financial year loss of US$13m and a trailing-twelve-month loss of US$8.2m, the ₪405m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on BrainsWay'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.

Check out 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 2024, before generating positive profits of US$2.9m in 2025. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 94% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for BrainsWay given that this is a high-level summary, however, bear in mind that generally 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. BrainsWay currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect 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 put together a list of key aspects you should further research:

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