TELA Bio, Inc. (NASDAQ:TELA): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at TELA Bio, Inc.'s (NASDAQ:TELA) future prospects. TELA Bio, Inc., a commercial-stage medical technology company, focuses on providing soft-tissue reconstruction solutions that optimize clinical outcomes by prioritizing the preservation and restoration of the patient’s anatomy. With the latest financial year loss of US$47m and a trailing-twelve-month loss of US$42m, the US$105m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is TELA Bio's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for TELA Bio

Consensus from 5 of the American Medical Equipment analysts is that TELA Bio is on the verge of breakeven. They expect the company to post a final loss in 2026, before turning a profit of US$13m in 2027. So, the company is predicted to breakeven approximately 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 65% 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.

We're not going to go through company-specific developments for TELA Bio given that this is a high-level summary, but, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. TELA Bio 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on TELA Bio, so if you are interested in understanding the company at a deeper level, take a look at TELA Bio's company page on Simply Wall St. We've also compiled a list of key factors you should look at:

1. Historical Track Record: What has TELA Bio'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 TELA Bio'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.