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We feel now is a pretty good time to analyse Cardiovascular Systems, Inc.'s (NASDAQ:CSII) business as it appears the company may be on the cusp of a considerable accomplishment. Cardiovascular Systems, Inc., a medical device company, develops and commercializes various devices to treat peripheral and coronary artery diseases in the United States. On 30 June 2021, the US$1.6b market-cap company posted a loss of US$13m for its most recent financial year. As path to profitability is the topic on Cardiovascular Systems' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Consensus from 9 of the American Medical Equipment analysts is that Cardiovascular Systems is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$8.8m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 74%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Cardiovascular Systems' growth isn’t the focus of this broad overview, though, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up -0.2% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of Cardiovascular Systems to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cardiovascular Systems' company page on Simply Wall St. We've also put together a list of important factors you should further examine:
Valuation: What is Cardiovascular Systems 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 Cardiovascular Systems 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 Cardiovascular Systems’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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