RUA Life Sciences plc's (LON:RUA) Shift From Loss To Profit

RUA Life Sciences plc (LON:RUA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. RUA Life Sciences plc, together with its subsidiaries, engages in the provision of polymers, services, and products to the medical device industry in Europe, the United States, and internationally. The UK£2.5m market-cap company announced a latest loss of UK£2.0m on 31 March 2023 for its most recent financial year result. As path to profitability is the topic on RUA Life Sciences' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for RUA Life Sciences

According to some industry analysts covering RUA Life Sciences, breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of UK£435k in 2026. So, the company is predicted to breakeven approximately 3 years from now. 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 62%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of RUA Life Sciences' upcoming projects, though, keep 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 4.1% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of RUA Life Sciences to cover in one brief article, but the key fundamentals for the company can all be found in one place – RUA Life Sciences' company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Valuation: What is RUA Life Sciences 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 RUA Life Sciences 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 RUA Life Sciences’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.