When Will Rhythm Biosciences Limited (ASX:RHY) Breakeven?
Rhythm Biosciences Limited (ASX:RHY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Rhythm Biosciences Limited, a transformative diagnostics company, engages in developing and commercializing of medical diagnostics technology in Australia and internationally. On 30 June 2021, the AU$403m market-cap company posted a loss of AU$6.6m for its most recent financial year. Many investors are wondering about the rate at which Rhythm Biosciences will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Rhythm Biosciences
Rhythm Biosciences is bordering on breakeven, according to some Australian Healthcare analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$11m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 76% is expected, which is rather optimistic! 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 Rhythm Biosciences given that this is a high-level summary, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that Rhythm Biosciences has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company 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 key fundamentals of Rhythm Biosciences 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 Rhythm Biosciences, take a look at Rhythm Biosciences' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:
Historical Track Record: What has Rhythm Biosciences' 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 Rhythm Biosciences' 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
