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With the business potentially at an important milestone, we thought we'd take a closer look at Cytosorbents Corporation's (NASDAQ:CTSO) future prospects. Cytosorbents Corporation engages in the research, development, and commercialization of medical devices with its blood purification technology platform incorporating a proprietary adsorbent and porous polymer technology. With the latest financial year loss of US$25m and a trailing-twelve-month loss of US$29m, the US$85m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Cytosorbents will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Cytosorbents is bordering on breakeven, according to the 5 American Medical Equipment analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$6.0m in 2024. 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 73%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Cytosorbents' growth isn’t the focus of this broad overview, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that Cytosorbents has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
There are key fundamentals of Cytosorbents 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 Cytosorbents, take a look at Cytosorbents' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:
Historical Track Record: What has Cytosorbents' 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 Cytosorbents' 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.