Delcath Systems, Inc.'s (NASDAQ:DCTH) Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at Delcath Systems, Inc.'s (NASDAQ:DCTH) future prospects. 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$48m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$50m, moving it further away from breakeven. As path to profitability is the topic on Delcath Systems' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See 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 2025, before generating positive profits of US$34m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. 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 66% 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.

Underlying developments driving Delcath Systems' growth isn’t the focus of this broad overview, but, 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 would like to bring into light with Delcath Systems is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Delcath Systems' case is 50%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Delcath Systems, so if you are interested in understanding the company at a deeper level, take a look at Delcath Systems' company page on Simply Wall St. We've also put together a list of essential factors you should further research:

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com