Accelerate Diagnostics Inc’s (NASDAQ:AXDX): Accelerate Diagnostics, Inc., an in vitro diagnostics company, provides solutions for the diagnosis of serious infections in the United States. The US$1.30b market-cap posted a loss in its most recent financial year of -US$64.03m and a latest trailing-twelve-month loss of -US$70.64m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on AXDX’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for AXDX, its year of breakeven and its implied growth rate.
AXDX is bordering on breakeven, according to Life Sciences analysts. They anticipate the company to incur a final loss in -1, before generating positive profits of US$0 in . Therefore, AXDX is expected to breakeven roughly a couple of months from now! How fast will AXDX have to grow each year in order to reach the breakeven point by ? Working backwards from analyst estimates, it turns out that they expect the company to grow 29.95% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of AXDX’s upcoming projects, though, take into account that by and large a life science company has lumpy cash flows which are contingent on the product and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I would like to bring into light with AXDX is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in AXDX’s case is 93.13%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on AXDX, so if you are interested in understanding the company at a deeper level, take a look at AXDX’s company page on Simply Wall St. I’ve also put together a list of important aspects you should further examine:
- Valuation: What is AXDX 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 AXDX 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 Accelerate Diagnostics’s board and the CEO’s back ground.
- 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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.