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We feel now is a pretty good time to analyse MiMedx Group, Inc.'s (NASDAQ:MDXG) business as it appears the company may be on the cusp of a considerable accomplishment. MiMedx Group, Inc. develops and distributes placental tissue allografts for various sectors of healthcare. With the latest financial year loss of US$83m and a trailing-twelve-month loss of US$88m, the US$1.4b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is MiMedx Group's 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.
According to the 2 industry analysts covering MiMedx Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$54m in 2023. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 67% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of MiMedx Group's upcoming projects, though, keep in mind that by and large biotechs, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we would like to bring into light with MiMedx Group is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in MiMedx Group's case is 57%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are key fundamentals of MiMedx Group 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 MiMedx Group, take a look at MiMedx Group's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:
Historical Track Record: What has MiMedx Group's 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 MiMedx Group'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.
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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