Market Sentiment Around Loss-Making IRRAS AB (publ) (STO:IRRAS)

IRRAS AB (publ)’s (STO:IRRAS): IRRAS AB (publ), a commercial stage medical technology company, develops and commercializes solutions for brain surgery in Germany, Rest of Europe, and the United States. With the latest financial year loss of -kr138.8m and a trailing-twelve month of -kr164.6m, the kr663m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which IRRAS will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for IRRAS’s growth and when analysts expect the company to become profitable.

See our latest analysis for IRRAS

IRRAS is bordering on breakeven, according to the 3 Medical Equipment analysts. They expect the company to post a final loss in 2021, before turning a profit of kr26m in 2022. Therefore, IRRAS is expected to breakeven roughly 2 years from now. How fast will IRRAS have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 56% 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.

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

One thing I’d like to point out is that IRRAS has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. IRRAS 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 key fundamentals of IRRAS which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at IRRAS, take a look at IRRAS’s company page on Simply Wall St. I’ve also put together a list of key aspects you should look at:

1. Historical Track Record: What has IRRAS’s 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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on IRRAS’s board and the CEO’s back ground.
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.

If you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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