Breakeven Is Near for Natus Medical Incorporated (NASDAQ:NTUS)

We feel now is a pretty good time to analyse Natus Medical Incorporated's (NASDAQ:NTUS) business as it appears the company may be on the cusp of a considerable accomplishment. Natus Medical Incorporated provides medical device solutions focusing on the diagnosis and treatment of patients with central nervous and sensory system disorders worldwide. The company’s loss has recently broadened since it announced a US$16m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$19m, moving it further away from breakeven. Many investors are wondering about the rate at which Natus Medical 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.

See our latest analysis for Natus Medical

Expectations from some of the American Medical Equipment analysts is that Natus Medical is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$1.4m in 2021. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 113% 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 Natus Medical's growth isn’t the focus of this broad overview, however, keep in mind that generally 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 prudently, with debt making up 17% 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 Natus Medical to cover in one brief article, but the key fundamentals for the company can all be found in one place – Natus Medical's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

1. Valuation: What is Natus Medical 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 Natus Medical 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 Natus Medical’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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