AVITA Medical (NasdaqCM:RCEL) opened Q1 2026 with revenue of US$19.3 million and a basic EPS loss of US$0.35, while trailing twelve month figures show revenue of US$72.3 million and a basic EPS loss of US$1.57. The company has seen quarterly revenue move from US$18.5 million in Q1 2025 to US$19.3 million in Q1 2026, alongside quarterly EPS losses shifting from US$0.53 to US$0.35. This keeps the focus firmly on how quickly margins can tighten and losses can be contained.

See our full analysis for AVITA Medical.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the widely followed narratives around AVITA Medical's growth potential and risk profile.

Losses Stay Large Even As Trailing EPS Improves To US$1.57 Loss

• On a trailing twelve month basis, AVITA Medical reported a loss of US$45.3 million and a basic EPS loss of US$1.57, compared with quarterly net income losses ranging from US$9.9 million to US$13.9 million over the last five reported quarters.
• Bulls point to this improving trailing EPS and revenue growth story, yet the earnings profile still has gaps:
  • Revenue on a trailing basis sits at US$72.3 million alongside a US$45.3 million loss, which means the business is still absorbing a sizeable amount of cost relative to sales even as quarterly EPS moved from a US$0.53 loss in Q1 2025 to a US$0.35 loss in Q1 2026.
  • Forecasts cited in the bullish view call for earnings to eventually turn positive with strong projected growth, so the current loss level needs to be weighed against whether that shift to profitability actually happens within the suggested time frame.

Revenue Growing At 17.9% While Losses Have Expanded 16.7% A Year

• Over the past five years, company losses have widened at about 16.7% per year while trailing twelve month revenue is reported as growing at 17.9% per year, so the current US$45.3 million loss is paired with revenue of US$72.3 million.
• Bears highlight that this mix of growth and losses keeps risk firmly on the table:
  • The business remains unprofitable with negative shareholders' equity and less than one year of cash runway, so a US$72.3 million revenue base has not yet translated into a self-funding model.
  • With shareholders having been diluted over the past year, bears argue that any further push to support this growth profile could come from additional capital raising, which would matter for how much of that future upside existing holders keep.

Skeptics warn that these widening historical losses and balance sheet pressures could outweigh the growth story unless the path to profitability becomes clearer, so it can be useful to compare this cautious view against the detailed bear case for AVITA Medical in 🐻 AVITA Medical Bear Case.

P/S Of 1.9x Versus Biotech Peers At 9.2x And 10.9x

• The stock is described as trading on a P/S of 1.9x, compared with a peer average of 9.2x and a US Biotechs industry average of 10.9x, while also being quoted as around 58.8% below an estimate of fair value and below a 7.79 analyst price target when set against the current share price of US$4.56.
• Supporters of the bullish narrative see this valuation gap as central to the opportunity, but the numbers cut both ways:
  • Analysts in the bullish camp expect strong earnings growth and an eventual move into profitability, so a lower multiple on US$72.3 million of trailing revenue can look appealing if those forecasts play out.
  • At the same time, the low P/S sits alongside negative shareholders' equity and a short cash runway, which means part of the discount may reflect these balance sheet risks rather than just underappreciated growth potential.

Bulls argue that this combination of a low 1.9x P/S and a quoted discount to fair value could be mispricing AVITA Medical's potential, and you can see how that argument is built out in more detail in 🐂 AVITA Medical Bull Case.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for AVITA Medical on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this mix of promise and concern feels finely balanced, do not wait on the sidelines. Check the 3 key rewards and 3 important warning signs.

See What Else Is Out There

AVITA Medical carries widening historical losses, negative shareholders' equity and a short cash runway, so balance sheet risk stays front and center for investors.

If you want ideas where financial footing looks steadier, start comparing companies screened through the solid balance sheet and fundamentals stocks screener (45 results) to quickly see which stocks might better match your risk comfort level.

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.