Neovasc Inc (NASDAQ:NVCN): Is Breakeven Near?

Neovasc Inc's (NASDAQ:NVCN): Neovasc Inc., a specialty medical device company, develops, manufactures, and markets cardiovascular devices worldwide. The US$30.26M market-cap company announced a latest loss of -US$22.91M on 31 December 2017 for its most recent financial year result. The most pressing concern for investors is NVCN’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for NVCN.

NVCN is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2020, before turning a profit of US$9.86M in 2021. Therefore, NVCN is expected to breakeven roughly 3 years from now. How fast will NVCN have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 45.71% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, NVCN may become profitable much later than analysts predict.

I’m not going to go through company-specific developments for NVCN given that this is a high-level summary, but, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one issue worth mentioning. NVCN currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of NVCN which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at NVCN, take a look at NVCN’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further research:

1. Historical Track Record: What has NVCN'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 Neovasc’s board and the CEO’s back ground.
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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.