LivaNova PLC (NASDAQ:LIVN): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at LivaNova PLC's (NASDAQ:LIVN) future prospects. LivaNova PLC, a medical device company, designs, develops, manufactures, and sells therapeutic solutions worldwide. The US$3.7b market-cap company announced a latest loss of US$344m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is LivaNova's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for LivaNova

LivaNova is bordering on breakeven, according to the 8 American Medical Equipment analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$32m in 2022. Therefore, the company is expected to breakeven just over a year from now. 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 72%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving LivaNova's growth isn’t the focus of this broad overview, though, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with LivaNova is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in LivaNova's case is 59%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of LivaNova to cover in one brief article, but the key fundamentals for the company can all be found in one place – LivaNova's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Valuation: What is LivaNova 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 LivaNova 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 LivaNova’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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