iRhythm Technologies, Inc. (NASDAQ:IRTC): Is Breakeven Near?

We feel now is a pretty good time to analyse iRhythm Technologies, Inc.'s (NASDAQ:IRTC) business as it appears the company may be on the cusp of a considerable accomplishment. iRhythm Technologies, Inc., a digital healthcare company, engages in the design, development, and commercialization of device-based technology that provides ambulatory cardiac monitoring services to diagnose arrhythmias in the United States. With the latest financial year loss of US$113m and a trailing-twelve-month loss of US$98m, the US$4.5b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which iRhythm Technologies will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

According to the 13 industry analysts covering iRhythm Technologies, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$14m in 2027. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 71% year-on-year, on average, which is extremely buoyant. 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 iRhythm Technologies given that this is a high-level summary, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

See our latest analysis for iRhythm Technologies

Before we wrap up, there’s one issue worth mentioning. iRhythm Technologies currently has a debt-to-equity ratio of over 2x. Typically, 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:

This article is not intended to be a comprehensive analysis on iRhythm Technologies, so if you are interested in understanding the company at a deeper level, take a look at iRhythm Technologies' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:

1. Valuation: What is iRhythm Technologies 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 iRhythm Technologies 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 iRhythm Technologies’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.