Loss-Making Zenicor Medical Systems AB (publ) (NGM:ZENI) Expected To Breakeven

Zenicor Medical Systems AB (publ)'s (NGM:ZENI): Zenicor Medical Systems AB (publ), a medical technology company, provides products and solutions for the diagnosis of arrhythmia and stroke prevention. The kr78m market-cap company’s loss lessens since it announced a -kr2.7m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -kr704.6k, as it approaches breakeven. The most pressing concern for investors is ZENI’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for ZENI.

Check out our latest analysis for Zenicor Medical Systems

According to the industry analysts covering ZENI, breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of kr400k in 2021. ZENI is therefore projected to breakeven around a few months from now. How fast will ZENI have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 113% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, ZENI may become profitable much later than analysts predict.

I’m not going to go through company-specific developments for ZENI given that this is a high-level summary, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I’d like to point out is that ZENI has managed its capital judiciously, with debt making up 24% of equity. This means that ZENI 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 ZENI, so if you are interested in understanding the company at a deeper level, take a look at ZENI’s company page on Simply Wall St. I’ve also put together a list of essential factors you should look at:

1. Valuation: What is ZENI 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 ZENI 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 Zenicor Medical Systems’s board and the CEO’s back ground.
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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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