Rockwell Medical, Inc. (NASDAQ:RMTI): Are Analysts Optimistic?
We feel now is a pretty good time to analyse Rockwell Medical, Inc.'s (NASDAQ:RMTI) business as it appears the company may be on the cusp of a considerable accomplishment. Rockwell Medical, Inc., together with its subsidiaries, operates as a healthcare company that engages in the development, manufacture, commercialization, and distribution of various hemodialysis products for dialysis providers worldwide. The US$59m market-cap company posted a loss in its most recent financial year of US$19m and a latest trailing-twelve-month loss of US$9.3m shrinking the gap between loss and breakeven. The most pressing concern for investors is Rockwell Medical's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Rockwell Medical
According to the 2 industry analysts covering Rockwell Medical, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$1.5m in 2025. The company is therefore projected to breakeven around 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 83% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Rockwell Medical given that this is a high-level summary, but, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Rockwell Medical is its debt-to-equity ratio of 168%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. 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 Rockwell Medical, so if you are interested in understanding the company at a deeper level, take a look at Rockwell Medical's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:
Historical Track Record: What has Rockwell Medical'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 Rockwell Medical'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.
