We feel now is a pretty good time to analyse ZimVie Inc.'s (NASDAQ:ZIMV) business as it appears the company may be on the cusp of a considerable accomplishment. ZimVie Inc., a medical technology company, develops, manufactures, and delivers a portfolio of products and solutions designed to treat a range of spine pathologies, and support dental tooth replacement and restoration procedures worldwide. The company’s loss has recently broadened since it announced a US$95m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$121m, moving it further away from breakeven. The most pressing concern for investors is ZimVie'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 ZimVie, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$58m in 2022. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 124%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving ZimVie's growth isn’t the focus of this broad overview, though, bear in mind 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 issue worth mentioning. ZimVie currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in ZimVie's case is 68%. 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 ZimVie, so if you are interested in understanding the company at a deeper level, take a look at ZimVie's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:
Valuation: What is ZimVie 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 ZimVie 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 ZimVie’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.
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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.
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