Stock Analysis

Analysts Expect Breakeven For iCAD, Inc. (NASDAQ:ICAD) Before Long

  •  Updated
NasdaqCM:ICAD
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With the business potentially at an important milestone, we thought we'd take a closer look at iCAD, Inc.'s (NASDAQ:ICAD) future prospects. iCAD, Inc. provides image analysis, workflow solutions, and radiation therapy for the treatment of cancer in the United States. With the latest financial year loss of US$14m and a trailing-twelve-month loss of US$19m, the US$225m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which iCAD will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for iCAD

iCAD is bordering on breakeven, according to the 5 American Healthcare Services analysts. They expect the company to post a final loss in 2021, before turning a profit of US$3.8m in 2022. The company is therefore projected to breakeven around 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 73% is expected, 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.

earnings-per-share-growth
NasdaqCM:ICAD Earnings Per Share Growth November 30th 2020

Underlying developments driving iCAD's growth isn’t the focus of this broad overview, but, take into account that by and large a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 30% 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 iCAD to cover in one brief article, but the key fundamentals for the company can all be found in one place – iCAD's company page on Simply Wall St. We've also put together a list of important factors you should further research:

  1. Historical Track Record: What has iCAD's 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 iCAD'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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