Loss-making Salona Global Medical Device Corporation (CVE:SGMD) is close to breaking even


We think it’s a good time to analyze Salona Global Medical Device Corporation (CVE:SGMD) As it seems, the company may be on the verge of a huge achievement. Salona Global Medical Device Corporation, through its subsidiaries, is engaged in the production and sale of medical devices and products in the United States. The C$38 million market capitalization company posted a loss of C$4.4 million in its last fiscal year and a latest loss of C$6.9 million in the last twelve months, this which resulted in an even wider gap between the loss and the break-even point. Many investors are wondering about the rate at which Salona Global Medical Device will make a profit, with the big question being “when will the company break even?” We’ve put together a brief overview of industry analysts’ expectations for the company, its breakeven year and its implied growth rate.

See our latest analysis for Salona Global Medical Device

The consensus of 2 of Canada’s medical device analysts is that Salona Global Medical Device is close to breaking even. They forecast that the business will incur a terminal loss in 2022, before generating positive profits of CA$369,000 in 2023. Thus, the business should break even in about a year or less! How fast will the business need to grow to reach the consensus forecast that calls for breakeven by 2023? Working backwards from analysts’ estimates, it turns out that they expect the company to grow 164% year-over-year, on average, signaling high confidence from from analysts. If the business grows at a slower pace, it will become profitable later than expected.

TSXV: SGMD Earnings per share growth August 28, 2022

The developments underlying Salona Global Medical Device’s growth are not the focus of this general overview, however, keep in mind that in general, a high growth rate is not unusual, particularly when a company is in a period of investment.

Before concluding, there is one aspect worth mentioning. The company managed its capital wisely, with debt representing 24% of equity. This means that it has mainly financed its operations from equity and that its low indebtedness reduces the risk associated with investing in the loss-making company.

Next steps:

There are too many aspects of Salona Global Medical Device to cover in a brief article, but the company fundamentals can all be found in one place – Salona Global Medical Device’s company page on Simply Wall St. We have also put together a list of relevant factors that you should consider in more detail:

  1. Historical review: How has Salona Global Medical Device performed in the past? Dig deeper into the past history analysis and take a look at the free visual representations of our analysis for clarity.
  2. Management team: An experienced management team at the helm bolsters our confidence in the company – take a look at who sits on Salona Global Medical Device’s Board of Directors and the CEO’s background.
  3. Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Explore our free list of these great stocks here.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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