Breakeven Is Near for Sharps Technology, Inc. (NASDAQ:STSS)

With the business potentially at an important milestone, we thought we'd take a closer look at Sharps Technology, Inc.'s (NASDAQ:STSS) future prospects. Sharps Technology Inc., a medical device company, researches, designs, develops, manufactures, distributes, and sells safety syringe products in the United States. The US$10m market-cap company posted a loss in its most recent financial year of US$4.7m and a latest trailing-twelve-month loss of US$5.4m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Sharps Technology's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Sharps Technology

According to some industry analysts covering Sharps Technology, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$190k in 2022. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 126% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Sharps Technology's growth isn’t the focus of this broad overview, but, 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.

One thing we’d like to point out is that Sharps Technology 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. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Story continues

Next Steps:

There are key fundamentals of Sharps Technology 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 Sharps Technology, take a look at Sharps Technology's company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:

1. Valuation: What is Sharps Technology 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 Sharps Technology 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 Sharps Technology’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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here

Comments are closed.