Yahoo Finance Analysts Expect Breakeven For Establishment Labs Holdings Inc. (NASDAQ:ESTA) Before Long
Establishment Labs Holdings Inc. (NASDAQ:ESTA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Establishment Labs Holdings Inc., a medical technology company, manufactures and markets medical devices for aesthetic and reconstructive plastic surgery. The US$1.4b market-cap company posted a loss in its most recent financial year of US$79m and a latest trailing-twelve-month loss of US$83m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Establishment Labs Holdings 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.
Check out our latest analysis for Establishment Labs Holdings
Establishment Labs Holdings is bordering on breakeven, according to the 7 American Medical Equipment analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$4.7m in 2026. The company is therefore projected to breakeven around 2 years 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 68%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Establishment Labs Holdings given that this is a high-level summary, however, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Establishment Labs Holdings is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Establishment Labs Holdings 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 Establishment Labs Holdings, take a look at Establishment Labs Holdings' company page on Simply Wall St. We've also compiled a list of essential factors you should look at:
Valuation: What is Establishment Labs Holdings 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 Establishment Labs Holdings is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Establishment Labs Holdings’s board and the CEO’s background.
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.
