Loss-Making iRhythm Technologies, Inc. (NASDAQ:IRTC) Expected To Breakeven In The Medium-Term

We feel now is a pretty good time to analyse iRhythm Technologies, Inc.'s (NASDAQ:IRTC) business as it appears the company may be on the cusp of a considerable accomplishment. iRhythm Technologies, Inc., a digital healthcare company, engages in the design, development, and commercialization of device-based technology to provide ambulatory cardiac monitoring services to diagnose arrhythmias in the United States. On 31 December 2023, the US$3.3b market-cap company posted a loss of US$123m for its most recent financial year. The most pressing concern for investors is iRhythm Technologies' 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.

View our latest analysis for iRhythm Technologies

According to the 12 industry analysts covering iRhythm Technologies, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$3.7m in 2026. Therefore, the company is expected to breakeven roughly 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 66%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of iRhythm Technologies' upcoming projects, however, take into account 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 17% 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 iRhythm Technologies 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 iRhythm Technologies, take a look at iRhythm Technologies' company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

1. Valuation: What is iRhythm Technologies 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 iRhythm Technologies is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on iRhythm Technologies’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.