Market Sentiment Around Loss-Making CardieX Limited (ASX:CDX)

CardieX Limited (ASX:CDX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. CardieX Limited engages in the design, manufacture, and marketing of medical devices used in cardiovascular health management in the Americas, Europe, and the Asia Pacific. The company’s loss has recently broadened since it announced a AU$6.8m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$15m, moving it further away from breakeven. The most pressing concern for investors is CardieX's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for CardieX

According to some industry analysts covering CardieX, breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of AU$24m in 2026. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 109%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for CardieX given that this is a high-level summary, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with CardieX is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in CardieX's case is 69%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of CardieX 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 CardieX, take a look at CardieX's company page on Simply Wall St. We've also put together a list of key factors you should further research:

1. Valuation: What is CardieX 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 CardieX 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 CardieX’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.

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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.