Establishment Labs Holdings Inc. (NASDAQ:ESTA): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Establishment Labs Holdings Inc.'s (NASDAQ:ESTA) future prospects. Establishment Labs Holdings Inc., a medical technology company, manufactures and markets medical devices for aesthetic and reconstructive plastic surgery. The US$1.0b market-cap company’s loss lessened since it announced a US$79m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$71m, as it approaches breakeven. The most pressing concern for investors is Establishment Labs Holdings' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Establishment Labs Holdings

According to the 7 industry analysts covering Establishment Labs Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of US$23m in 2027. The company is therefore projected to breakeven around 2 years from today. 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 48%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Establishment Labs Holdings given that this is a high-level summary, though, bear in mind that typically 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 issue worth mentioning. Establishment Labs Holdings currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Establishment Labs Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Establishment Labs Holdings' company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

1. Valuation: What is Establishment Labs Holdings 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 Establishment Labs Holdings 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 Establishment Labs Holdings’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. 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.