Loss-Making Avinger Inc (NASDAQ:AVGR) Expected To Breakeven
Avinger Inc’s (NASDAQ:AVGR): Avinger, Inc., a commercial-stage medical device company, designs, manufactures, and sells image-guided and catheter-based systems used by physicians to treat patients with peripheral arterial disease (PAD) in the United States and Europe. The US$9.29M market-cap posted a loss in its most recent financial year of -US$48.73M and a latest trailing-twelve-month loss of -US$49.30M leading to an even wider gap between loss and breakeven. Many investors are wondering the rate at which AVGR will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for AVGR’s growth and when analysts expect the company to become profitable.
See our latest analysis for Avinger
AVGR is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$80.00K in 2022. So, AVGR is predicted to breakeven approximately 4 years from now. What rate will AVGR 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 41.42%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving AVGR’s growth isn’t the focus of this broad overview, however, take into account that generally 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 issue worth mentioning. AVGR currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in AVGR’s case is 63.28%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on AVGR, so if you are interested in understanding the company at a deeper level, take a look at AVGR’s company page on Simply Wall St. I’ve also compiled a list of important factors you should further research:
Historical Track Record: What has AVGR’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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Avinger’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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
