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Loss-Making Opsens Inc. (TSE:OPS) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Opsens Inc.'s (TSE:OPS) future prospects. Opsens Inc. develops, manufactures, installs, and sells fiber optic sensors for cardiovascular interventions. On 31 August 2022, the CA$235m market-cap company posted a loss of CA$11m for its most recent financial year. As path to profitability is the topic on Opsens' 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.

See our latest analysis for Opsens

Consensus from 5 of the Canadian Medical Equipment analysts is that Opsens is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of CA$5.7m in 2025. The company is therefore projected to breakeven around 3 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 59% is expected, 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

Underlying developments driving Opsens' growth isn’t the focus of this broad overview, 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 3.2% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Opsens, so if you are interested in understanding the company at a deeper level, take a look at Opsens' company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

  1. Valuation: What is Opsens 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 Opsens 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 Opsens’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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