When Will Biomerica, Inc. (NASDAQ:BMRA) Become Profitable?

By
Simply Wall St
Published
December 20, 2020

We feel now is a pretty good time to analyse Biomerica, Inc.'s (NASDAQ:BMRA) business as it appears the company may be on the cusp of a considerable accomplishment. Biomerica, Inc., a biomedical technology company, together with its subsidiaries, develops, patents, manufactures, and markets diagnostic and therapeutic products or detection and/or treatment of medical conditions and diseases worldwide. The company’s loss has recently broadened since it announced a US$2.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$3.5m, moving it further away from breakeven. Many investors are wondering about the rate at which Biomerica will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Biomerica

Consensus from 4 of the American Medical Equipment analysts is that Biomerica is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$1.6m in 2022. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 99% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqCM:BMRA Earnings Per Share Growth December 20th 2020

We're not going to go through company-specific developments for Biomerica given that this is a high-level summary, however, take into account 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 Biomerica has no debt on its balance sheet, which is rare for a loss-making loss-making, growth 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:

There are key fundamentals of Biomerica 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 Biomerica, take a look at Biomerica's company page on Simply Wall St. We've also put together a list of essential factors you should further research:

  1. Valuation: What is Biomerica 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 Biomerica 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 Biomerica’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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