With the business potentially at an important milestone, we thought we'd take a closer look at Venus Concept Inc.'s (NASDAQ:VERO) future prospects. Venus Concept Inc., a medical technology company, develops, commercializes, and delivers minimally invasive and non-invasive medical aesthetic and hair restoration technologies, and related services in the United States and internationally. The US$35m market-cap company posted a loss in its most recent financial year of US$23m and a latest trailing-twelve-month loss of US$22m shrinking the gap between loss and breakeven. As path to profitability is the topic on Venus Concept's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Consensus from 4 of the American Medical Equipment analysts is that Venus Concept is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$7.7m in 2024. 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 80% is expected, which is rather optimistic! 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 Venus Concept given that this is a high-level summary, though, take into account 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. Venus Concept currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Venus Concept, so if you are interested in understanding the company at a deeper level, take a look at Venus Concept's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
Historical Track Record: What has Venus Concept'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 Venus Concept'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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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