We feel now is a pretty good time to analyse AVITA Medical, Inc.'s (NASDAQ:RCEL) business as it appears the company may be on the cusp of a considerable accomplishment. AVITA Medical, Inc., together with its subsidiaries, operates as a therapeutic acute wound care company in the United States, Japan, the European Union, Australia, and the United Kingdom. The US$106m market-cap company’s loss lessened since it announced a US$62m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$49m, as it approaches breakeven. The most pressing concern for investors is AVITA Medical's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

AVITA Medical is bordering on breakeven, according to the 10 American Biotechs analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$12m in 2027. So, the company is predicted to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 54% 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.

We're not going to go through company-specific developments for AVITA Medical given that this is a high-level summary, though, keep in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one issue worth mentioning. AVITA Medical currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on AVITA Medical, so if you are interested in understanding the company at a deeper level, take a look at AVITA Medical's company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Historical Track Record: What has AVITA Medical'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 AVITA Medical'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.

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.