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When Can We Expect A Profit From Cyclopharm Limited (ASX:CYC)?

We feel now is a pretty good time to analyse Cyclopharm Limited's (ASX:CYC) business as it appears the company may be on the cusp of a considerable accomplishment. Cyclopharm Limited manufacture and sells medical equipment and radiopharmaceuticals in the Asia Pacific, Europe, Canada, and internationally. The AU$197m market-cap company announced a latest loss of AU$6.6m on 31 December 2022 for its most recent financial year result. As path to profitability is the topic on Cyclopharm'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 Cyclopharm

According to the 3 industry analysts covering Cyclopharm, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of AU$3.1m in 2024. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 98% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Cyclopharm's upcoming projects, though, 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.

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One thing we’d like to point out is that Cyclopharm has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Cyclopharm to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cyclopharm's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

  1. Valuation: What is Cyclopharm worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Cyclopharm is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Cyclopharm’s board and the CEO’s background.

  3. 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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