Breakeven On The Horizon For Applied BioCode Corporation (TPE:6598)

We feel now is a pretty good time to analyse Applied BioCode Corporation's (TPE:6598) business as it appears the company may be on the cusp of a considerable accomplishment. Applied BioCode Corporation designs, develops, manufactures, and commercializes multiplex testing products for the In-Vitro diagnostics market. The NT$5.2b market-cap company’s loss lessened since it announced a NT$280m loss in the full financial year, compared to the latest trailing-twelve-month loss of NT$208m, as it approaches breakeven. The most pressing concern for investors is Applied BioCode's path to profitability – when will it breakeven? 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 Applied BioCode

Expectations from some of the Taiwanese Medical Equipment analysts is that Applied BioCode is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of NT$297m in 2021. 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 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 198% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Applied BioCode's growth isn’t the focus of this broad overview, however, keep in mind that generally 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 The company has managed its capital judiciously, with debt making up 2.6% of equity. This means that it 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:

There are key fundamentals of Applied BioCode which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Applied BioCode, take a look at Applied BioCode's company page on Simply Wall St. We've also put together a list of essential aspects you should further research:

1. Valuation: What is Applied BioCode 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 Applied BioCode 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 Applied BioCode’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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