Second Sight Medical Products Inc’s (NASDAQ:EYES): Second Sight Medical Products, Inc., together with its subsidiaries, develops, manufactures, and markets prosthetic devices to restore functional vision of blind individuals in the United States, Canada, Europe, the Middle East, and Asia. The US$111.94m market-cap posted a loss in its most recent financial year of -US$28.52m and a latest trailing-twelve-month loss of -US$30.72m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is EYES’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for EYES, its year of breakeven and its implied growth rate.
Expectation from Medical Equipment analysts is EYES is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$5.18m in 2022. So, EYES is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which EYES must grow year-on-year. It turns out an average annual growth rate of 30.47% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of EYES’s upcoming projects, 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 I wrap up, there’s one aspect worth mentioning. EYES currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. EYES currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on EYES, so if you are interested in understanding the company at a deeper level, take a look at EYES’s company page on Simply Wall St. I’ve also compiled a list of essential factors you should further examine:
- Historical Track Record: What has EYES’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 Second Sight Medical Products’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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.