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Atomo Diagnostics Limited's (ASX:AT1): Atomo Diagnostics Limited researches, designs, develops, manufactures, and sells medical devices for blood-based rapid testing for professional use and self-testing. The company’s loss has recently broadened since it announced a AU$5.1m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$5.2m, moving it further away from breakeven. The most pressing concern for investors is AT1’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for AT1, its year of breakeven and its implied growth rate.
AT1 is bordering on breakeven, according to Medical Equipment analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of AU$3.3m in 2021. So, AT1 is predicted to breakeven approximately a few months from now. How fast will AT1 have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 115% year-on-year, on average, which is extremely buoyant. 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 AT1’s upcoming projects, however, keep 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 AT1 is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
There are too many aspects of AT1 to cover in one brief article, but the key fundamentals for the company can all be found in one place – AT1’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should look at:
- Valuation: What is AT1 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 AT1 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 Atomo 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.
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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