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Nephros, Inc. (NASDAQ:NEPH) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Nephros, Inc., a commercial-stage company, develops and sells water solutions to the medical and commercial markets in the United States. The US$16m market-cap company posted a loss in its most recent financial year of US$1.6m and a latest trailing-twelve-month loss of US$929k shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Nephros will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Nephros
Expectations from some of the American Machinery analysts is that Nephros is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$73k in 2025. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 128%, which signals high confidence from analysts. 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 Nephros' upcoming projects, however, take into account 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. Nephros currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Nephros which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Nephros, take a look at Nephros' company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:
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Historical Track Record: What has Nephros' 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.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Nephros' board and the CEO’s background.
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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.
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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.