Sedana Medical AB (publ) (STO:SEDANA) Is Expected To Breakeven In The Near Future

With the business potentially at an important milestone, we thought we'd take a closer look at Sedana Medical AB (publ)'s (STO:SEDANA) future prospects. Sedana Medical AB (publ), a medical technology company, develops, manufactures, and sells medical devices and pharmaceutical products in Sweden and internationally. On 31 December 2023, the kr1.7b market-cap company posted a loss of kr60m for its most recent financial year. The most pressing concern for investors is Sedana Medical's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Sedana Medical

Consensus from 2 of the Swedish Medical Equipment analysts is that Sedana Medical is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr4.0m in 2026. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? 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.

We're not going to go through company-specific developments for Sedana Medical given that this is a high-level summary, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Sedana Medical has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high 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 Sedana Medical, so if you are interested in understanding the company at a deeper level, take a look at Sedana Medical's company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:

1. Valuation: What is Sedana Medical 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 Sedana Medical 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 Sedana Medical’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.