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When Will IsoRay, Inc. (NYSEMKT:ISR) Turn A Profit?

Simply Wall St
·3 mins read

IsoRay, Inc.'s (NYSEMKT:ISR): IsoRay, Inc., through its subsidiary, IsoRay Medical, Inc., develops, manufactures, and sells isotope-based medical products and devices for the treatment of cancer and other malignant diseases in the United States. The US$47m market-cap company’s loss lessens since it announced a US$5.2m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$3.4m, as it approaches breakeven. As path to profitability is the topic on ISR’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for ISR, its year of breakeven and its implied growth rate.

View our latest analysis for IsoRay

ISR is bordering on breakeven, according to the 2 Biotechs analysts. They expect the company to post a final loss in 2021, before turning a profit of US$471k in 2022. So, ISR is predicted to breakeven approximately 2 years from today. How fast will ISR have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 62% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, ISR may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

I’m not going to go through company-specific developments for ISR given that this is a high-level summary, though, bear in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that ISR has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. This means that ISR 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.

Next Steps:

There are too many aspects of ISR to cover in one brief article, but the key fundamentals for the company can all be found in one place – ISR’s company page on Simply Wall St. I’ve also put together a list of key aspects you should look at:

  1. Historical Track Record: What has ISR's 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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on IsoRay’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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.