Cytosorbents Corporation's (NASDAQ:CTSO): Cytosorbents Corporation, a critical care focused immunotherapy company, engages in the research, development, and commercialization of medical devices with its blood purification technology platform incorporating a proprietary adsorbent and porous polymer technology worldwide. The US$179m market-cap company’s loss lessens since it announced a -US$17.2m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$16.8m, as it approaches breakeven. The most pressing concern for investors is CTSO’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for CTSO’s growth and when analysts expect the company to become profitable.
Consensus from the 5 Medical Equipment analysts is CTSO is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$2.2m in 2022. So, CTSO is predicted to breakeven approximately 3 years from today. How fast will CTSO have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 73% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for CTSO given that this is a high-level summary, however, bear in mind that typically 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 CTSO is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in CTSO’s case is 87%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are too many aspects of CTSO to cover in one brief article, but the key fundamentals for the company can all be found in one place – CTSO’s company page on Simply Wall St. I’ve also put together a list of key factors you should further research:
- Valuation: What is CTSO 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 CTSO 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 Cytosorbents’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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.