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Market Sentiment Around Loss-Making Axonics Modulation Technologies, Inc. (NASDAQ:AXNX)

Simply Wall St

Axonics Modulation Technologies, Inc.'s (NASDAQ:AXNX): Axonics Modulation Technologies, Inc., a medical technology company, focuses on the design, development, and commercialization of sacral neuromodulation solutions (SNM) solutions. The US$1.0b market-cap posted a loss in its most recent financial year of -US$32.5m and a latest trailing-twelve-month loss of -US$66.8m leading to an even wider gap between loss and breakeven. Many investors are wondering the rate at which AXNX will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for AXNX.

View our latest analysis for Axonics Modulation Technologies

Consensus from the 7 Medical Equipment analysts is AXNX is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$43m in 2022. Therefore, AXNX is expected to breakeven roughly 2 years from today. How fast will AXNX 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 66% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, AXNX may become profitable much later than analysts predict.

NasdaqGS:AXNX Past and Future Earnings, January 15th 2020

Underlying developments driving AXNX’s growth isn’t the focus of this broad overview, however, take into account that by and large 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 AXNX has managed its capital prudently, with debt making up 22% of equity. This means that AXNX has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of AXNX which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at AXNX, take a look at AXNX’s company page on Simply Wall St. I’ve also put together a list of key aspects you should further examine:

  1. Valuation: What is AXNX 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 AXNX 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 Axonics Modulation Technologies’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.

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.

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