Analysts Expect Breakeven For Nephros, Inc. (NASDAQ:NEPH)
Nephros, Inc.'s (NASDAQ:NEPH): Nephros, Inc., a commercial stage medical device and commercial product company, develops and sells liquid purification filters and hemodiafiltration (HDF) systems primarily in the United States. The US$61m market-cap posted a loss in its most recent financial year of -US$3.4m and a latest trailing-twelve-month loss of -US$3.9m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is NEPH’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for NEPH.
View our latest analysis for Nephros
According to the 3 industry analysts covering NEPH, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$1.4m in 2021. NEPH is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, I calculated the rate at which NEPH must grow year-on-year. It turns out an average annual growth rate of 84% is expected, which signals high confidence from analysts. 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 NEPH given that this is a high-level summary, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that NEPH has managed its capital prudently, with debt making up 28% of equity. This means that NEPH 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 too many aspects of NEPH to cover in one brief article, but the key fundamentals for the company can all be found in one place – NEPH’s company page on Simply Wall St. I’ve also put together a list of essential factors you should further research:
Historical Track Record: What has NEPH'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 Nephros’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.
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