CSAM Health Group AS (OB:CSAM) Is About To Turn The Corner

With the business potentially at an important milestone, we thought we'd take a closer look at CSAM Health Group AS' (OB:CSAM) future prospects. CSAM Health Group AS provides various ehealth solutions in Norway, Sweden, Denmark, Finland, Spain, the United Kingdom, and the Philippines. On 31 December 2020, the kr1.8b market-cap company posted a loss of kr9.2m for its most recent financial year. The most pressing concern for investors is CSAM Health Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for CSAM Health Group

Expectations from some of the Norwegian Healthcare Services analysts is that CSAM Health Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of kr21m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 69% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of CSAM Health Group's upcoming projects, however, keep in mind that generally healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one issue worth mentioning. CSAM Health Group currently has a debt-to-equity ratio of 114%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of CSAM Health Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – CSAM Health Group's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is CSAM Health Group 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 CSAM Health Group 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 CSAM Health Group’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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