We feel now is a pretty good time to analyse Sharps Technology, Inc.'s (NASDAQ:STSS) business as it appears the company may be on the cusp of a considerable accomplishment. Sharps Technology Inc., a medical device company, researches, designs, develops, manufactures, distributes, and sells safety syringe products in the United States. The US$9.2m market-cap company announced a latest loss of US$4.6m on 31 December 2022 for its most recent financial year result. Many investors are wondering about the rate at which Sharps Technology will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to some industry analysts covering Sharps Technology, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$5.6m in 2023. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 116%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Sharps Technology given that this is a high-level summary, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. Sharps Technology currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are key fundamentals of Sharps Technology which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Sharps Technology, take a look at Sharps Technology's company page on Simply Wall St. We've also put together a list of essential aspects you should further research:
Valuation: What is Sharps Technology 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 Sharps Technology is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Sharps Technology’s board and the CEO’s background.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
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