SUSMED,Inc. (TSE:4263): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at SUSMED,Inc.'s (TSE:4263) future prospects. SUSMED,Inc. develops and sells therapeutic applications in Japan. The JP¥9.0b market-cap company posted a loss in its most recent financial year of JP¥50m and a latest trailing-twelve-month loss of JP¥357m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on SUSMEDInc's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for SUSMEDInc

Expectations from some of the Japanese Healthcare Services analysts is that SUSMEDInc is on the verge of breakeven. They expect the company to post a final loss in 2026, before turning a profit of JP¥400m in 2027. Therefore, the company is expected to breakeven roughly 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 70% 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.

Underlying developments driving SUSMEDInc's growth isn’t the focus of this broad overview, though, bear in mind that by and large a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that SUSMEDInc has no debt on its balance sheet, which is quite unusual for a cash-burning healthcare tech company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Valuation: What is SUSMEDInc 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 SUSMEDInc 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 SUSMEDInc’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.