RE:Research Capital: Take a pass on Profound Medical I took another look at Andre Uddin's analysis and I found this part surprising:
Uddin projects "revenues of $16.1 million in 2021, then more than doubling to a projected $33.8 million for 2022, $47.9 million for 2023, $63.8 million in 2024, then climbing to $71.4 million for 2025, which is also the first year Uddin forecasts positive values for earnings per share and cash flow per share"
He sees exponential revenue growth for 2021 and 2022 with respectable growth thereafter (though despite "Uddin noting that the (CPT-1) code becoming effective in January 2024 would significantly accelerate TULSA-PRO’s sales growth." he doesn't show anything like exponential growth resulting). Profound's projections for new installations should mean exponential growth through 2021 & 2022 if not beyond.
What surprises me is that Uddin sees negative earnings even as revenue climbs over $60 million in his 2024 projection. I'd expect that a growing percentage of the revenue increases would be high margin recurring revenue with much of it going to the bottom line.
For example the $2.6 million revenue in Q2 corresponds to $10.4 million revenue annualized with a $28.560 million annualized loss. All other things being equal, if you add $50 million in very high margin revenue you might expect to cover that $28.560 deficit and then some. Of course all other things are never quite equal - doubling sales and installation teams will increase expenses.
Does anyone have a better understanding of Uddin's forecast? Does anyone out there know how PRN would gernerate a loss with over $60 million in revenue?
-TIA!