Rockwell Medical, Inc. (NASDAQ:RMTI): Is Breakeven Near?
Rockwell Medical, Inc. (NASDAQ:RMTI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Rockwell Medical, Inc. operates as a biopharmaceutical 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$104m market-cap company posted a loss in its most recent financial year of US$34.1m and a latest trailing-twelve-month loss of US$30.0m shrinking the gap between loss and breakeven. As path to profitability is the topic on Rockwell Medical's investors mind, we've decided to gauge market sentiment. 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
Consensus from 2 of the American Medical Equipment analysts is that Rockwell Medical is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$12m in 2022. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 66%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Rockwell Medical's upcoming projects, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Rockwell Medical currently has a debt-to-equity ratio of 128%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Rockwell Medical to cover in one brief article, but the key fundamentals for the company can all be found in one place – Rockwell Medical's company page on Simply Wall St. We've also compiled a list of important factors you should look at:
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.
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. 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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