Loss-Making Neovasc Inc (NASDAQ:NVCN) Expected To Breakeven
Neovasc Inc’s (NASDAQ:NVCN): Neovasc Inc., a specialty medical device company, develops, manufactures, and markets cardiovascular devices worldwide. The company’s loss has recently broadened since it announced a -US$22.91M loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$70.94M, moving it further away from breakeven. The most pressing concern for investors is NVCN’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for NVCN, its year of breakeven and its implied growth rate.
See our latest analysis for Neovasc
NVCN is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$2.46M in 2021. NVCN is therefore projected to breakeven around 3 years from today. What rate will NVCN 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 66.53%, which signals high confidence from analysts. If this rate turns out to be too aggressive, NVCN may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of NVCN’s upcoming projects, but, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. NVCN currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
This article is not intended to be a comprehensive analysis on NVCN, so if you are interested in understanding the company at a deeper level, take a look at NVCN’s company page on Simply Wall St. I’ve also put together a list of important factors you should further research:
Historical Track Record: What has NVCN’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 Neovasc’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.
