We Might See A Profit From ShockWave Medical, Inc. (NASDAQ:SWAV) Soon

By
Simply Wall St
Published
April 14, 2022
NasdaqGS:SWAV
Source: Shutterstock

With the business potentially at an important milestone, we thought we'd take a closer look at ShockWave Medical, Inc.'s (NASDAQ:SWAV) future prospects. ShockWave Medical, Inc., a medical device company, engages in developing and commercializing intravascular lithotripsy technology for the treatment of calcified plaque in patients with peripheral vascular, coronary vascular, and heart valve diseases worldwide. The US$7.6b market-cap company announced a latest loss of US$9.1m on 31 December 2021 for its most recent financial year result. Many investors are wondering about the rate at which ShockWave Medical 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.

Check out our latest analysis for ShockWave Medical

ShockWave Medical is bordering on breakeven, according to the 8 American Medical Equipment analysts. They expect the company to post a final loss in 2021, before turning a profit of US$53m in 2022. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 49% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
NasdaqGS:SWAV Earnings Per Share Growth April 14th 2022

Underlying developments driving ShockWave Medical's growth isn’t the focus of this broad overview, however, 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.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 7.1% 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 ShockWave Medical 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 ShockWave Medical, take a look at ShockWave Medical's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

  1. Historical Track Record: What has ShockWave Medical'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 ShockWave 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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