Analysts Expect Breakeven For IRIDEX Corporation (NASDAQ:IRIX) Before Long

IRIDEX Corporation (NASDAQ:IRIX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. IRIDEX Corporation, an ophthalmic medical technology company, provides therapeutic based laser systems, delivery devices, and consumable instrumentation to treat sight-threatening eye diseases in ophthalmology. The US$35m market-cap company’s loss lessened since it announced a US$8.8m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$7.7m, as it approaches breakeven. As path to profitability is the topic on IRIDEX's 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.

Check out our latest analysis for IRIDEX

IRIDEX is bordering on breakeven, according to the 2 American Medical Equipment analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$3.0m in 2023. So, the company is predicted to breakeven approximately 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 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 IRIDEX's growth isn’t the focus of this broad overview, however, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 14% 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 IRIDEX 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 IRIDEX, take a look at IRIDEX's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Historical Track Record: What has IRIDEX'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 IRIDEX'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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