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When Can We Expect A Profit From Biomerica, Inc. (NASDAQ:BMRA)?

Simply Wall St

Biomerica, Inc.'s (NASDAQ:BMRA): Biomerica, Inc., together with its subsidiaries, develops, manufactures, and markets medical diagnostic products for the early detection and monitoring of chronic diseases and medical conditions. The company’s loss has recently broadened since it announced a -US$1.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$2.3m, moving it further away from breakeven. As path to profitability is the topic on BMRA’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for BMRA.

See our latest analysis for Biomerica

Consensus from the 2 Medical Equipment analysts is BMRA is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$3.4m in 2022. Therefore, BMRA is expected to breakeven roughly 3 years from now. What rate will BMRA have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 62%, which is extremely buoyant. If this rate turns out to be too aggressive, BMRA may become profitable much later than analysts predict.

NasdaqCM:BMRA Past and Future Earnings, July 25th 2019

Given this is a high-level overview, I won’t go into details of BMRA’s upcoming projects, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. BMRA currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. BMRA currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on BMRA, so if you are interested in understanding the company at a deeper level, take a look at BMRA’s company page on Simply Wall St. I’ve also put together a list of important factors you should further examine:

  1. Valuation: What is BMRA 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 BMRA is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Biomerica’s board and the CEO’s back ground.
  3. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.