Stock Analysis

iCAD, Inc. (NASDAQ:ICAD): Is Breakeven Near?

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NasdaqCM:ICAD
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We feel now is a pretty good time to analyse iCAD, Inc.'s (NASDAQ:ICAD) business as it appears the company may be on the cusp of a considerable accomplishment. iCAD, Inc. provides image analysis, workflow solutions, and radiation therapy for the treatment of cancer in the United States. The US$472m market-cap company announced a latest loss of US$18m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is iCAD's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for iCAD

According to the 8 industry analysts covering iCAD, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$6.7m in 2023. The company is therefore projected to breakeven around 2 years from now. 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. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NasdaqCM:ICAD Earnings Per Share Growth March 19th 2021

Underlying developments driving iCAD's growth isn’t the focus of this broad overview, though, keep in mind that typically healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. So, 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 23% 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 key fundamentals of iCAD 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 iCAD, take a look at iCAD's company page on Simply Wall St. We've also put together a list of essential factors you should look at:

  1. Valuation: What is iCAD 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 iCAD 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 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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