Breakeven On The Horizon For Delcath Systems, Inc. (NASDAQ:DCTH)

We feel now is a pretty good time to analyse Delcath Systems, Inc.'s (NASDAQ:DCTH) business as it appears the company may be on the cusp of a considerable accomplishment. Delcath Systems, Inc., an interventional oncology company, focuses on the treatment of primary and metastatic liver cancers in the United States and Europe. The company’s loss has recently broadened since it announced a US$26m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$32m, moving it further away from breakeven. The most pressing concern for investors is Delcath Systems' 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 Delcath Systems

Consensus from 5 of the American Medical Equipment analysts is that Delcath Systems is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$6.6m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 60%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Delcath Systems' growth isn’t the focus of this broad overview, though, take into account 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 would like to bring into light with Delcath Systems is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of Delcath Systems 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 Delcath Systems, take a look at Delcath Systems' company page on Simply Wall St. We've also compiled a list of important aspects you should further examine:

1. Historical Track Record: What has Delcath Systems' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Delcath Systems' 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.