Rockwell Medical, Inc.'s (NASDAQ:RMTI): Rockwell Medical, Inc. operates as a specialty pharmaceutical company that targets end-stage renal disease and chronic kidney disease with therapies and products for the treatment of iron deficiency and hemodialysis. The US$143m market-cap posted a loss in its most recent financial year of -US$32.1m and a latest trailing-twelve-month loss of -US$36.2m leading to an even wider gap between loss and breakeven. Many investors are wondering the rate at which RMTI will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for RMTI’s growth and when analysts expect the company to become profitable.
Consensus from the 3 Medical Equipment analysts is RMTI is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$27m in 2022. RMTI is therefore projected to breakeven around 3 years from today. What rate will RMTI 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%, which signals high confidence from analysts. If this rate turns out to be too aggressive, RMTI may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of RMTI’s upcoming projects, however, 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 I’d like to point out is that RMTI has managed its capital judiciously, with debt making up 4.8% of equity. This means that RMTI has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of RMTI 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 RMTI, take a look at RMTI’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should look at:
- Historical Track Record: What has RMTI'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 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.