Yahoo Finance Loss-Making DIAGNOS Inc. (CVE:ADK) Expected To Breakeven In The Medium-Term
DIAGNOS Inc. (CVE:ADK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. DIAGNOS Inc. provides software-based interpretation services primarily in Canada, the United States, Kenya, the United Arab Emirates, Bangladesh, Saudi Arabia, and Costa Rica. With the latest financial year loss of CA$3.4m and a trailing-twelve-month loss of CA$2.7m, the CA$39m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on DIAGNOS' investors mind, we've decided to gauge market sentiment. 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 DIAGNOS
DIAGNOS is bordering on breakeven, according to some Canadian Healthcare Services analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of CA$2.3m in 2023. 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 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, 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 DIAGNOS given that this is a high-level summary, but, bear in mind that generally a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 14% 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:
This article is not intended to be a comprehensive analysis on DIAGNOS, so if you are interested in understanding the company at a deeper level, take a look at DIAGNOS' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:
Historical Track Record: What has DIAGNOS' 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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on DIAGNOS' 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.
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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