Redsense Medical AB earnings outlook (publ) (NGM:REDS)

We think it’s a good time to analyze Redsense Medical AB (publ) (NGM: RED) As it seems, the company may be on the verge of a huge achievement. Redsense Medical AB (publ) develops, markets and sells monitoring systems for medical treatments primarily in Europe and the United States. With the last fiscal year loss of kr 8.0 million and a trailing year loss of kr 6.9 million, the kr 124 million market cap company mitigated its loss by closing in on of its objective of balance. The most pressing concern for investors is Redsense Medical’s path to profitability – when will it break even? Below, we’ll provide a high-level summary of industry analysts’ expectations for the company.

Our analysis indicates that The REDS is potentially overvalued!

Redsense Medical is close to breaking even, according to some Swedish Medical Equipment analysts. They expect the business to make a final loss in 2023, before making a profit of 8.3 million kr in 2024. Therefore, the business is expected to break even in about 2 years. How fast will the business need to grow year over year to break even by that date? Using a line of best fit, we calculated an average annual growth rate of 109%, which signals high confidence from analysts. If the business grows at a slower rate, it will become profitable later than expected.

NGM: REDS earnings per share growth October 23, 2022

We are not going to review company-specific developments for Redsense Medical since this is a high-level summary, however, consider that in general a high rate of growth is not unusual, particularly when a business is in an investment period.

One thing we would like to point out is that Redsense Medical has no debt on its balance sheet, which is quite unusual for a growing, cash-burning company, which typically has high debt to equity ratios. This means that the business has operated solely on its equity investment and has no debt. This aspect reduces the risk associated with investing in the loss-making company.

Next steps:

There are fundamentals of Redsense Medical that are not covered in this article, but we must re-emphasize that this is only a basic overview. For a more complete overview of Redsense Medical, see Redsense Medical’s company page on Simply Wall St. We have also compiled a list of relevant aspects you should consider:

  1. Historical review: How has Redsense Medical performed in the past? Go deeper into past track record analysis and take a look at free visual representations of our analysis to clarify more.
  2. Management team: An experienced management team at the helm boosts our confidence in the business – take a look at who sits on the board of Redsense Medical and the CEO experience.
  3. Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Discover our free list of these great stocks here.

Valuation is complex, but we help make it simple.

Find out if Redsense Medical is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

See the free analysis

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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