When Will Dynatronics Corporation (NASDAQ:DYNT) Become Profitable?

Dynatronics Corporation (NASDAQ:DYNT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Dynatronics Corporation, a medical device company, designs, manufactures, and sells physical therapy, rehabilitation, orthopedics, pain management, and athletic training products in the United States. With the latest financial year loss of US$4.3m and a trailing-twelve-month loss of US$5.3m, the US$23m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Dynatronics' investors mind, we've decided to gauge market sentiment. 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 Dynatronics

Dynatronics is bordering on breakeven, according to the 4 American Medical Equipment analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$1.6m in 2023. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 76% 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 Dynatronics' growth isn’t the focus of this broad overview, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 19% 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 too many aspects of Dynatronics to cover in one brief article, but the key fundamentals for the company can all be found in one place – Dynatronics' company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

1. Valuation: What is Dynatronics 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 Dynatronics 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 Dynatronics’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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