With the business potentially at an important milestone, we thought we'd take a closer look at Digirad Corporation's (NASDAQ:DRAD) future prospects. Digirad Corporation provides healthcare solutions in the United States and internationally. The company’s loss has recently broadened since it announced a US$5.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$8.2m, moving it further away from breakeven. The most pressing concern for investors is Digirad's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Digirad

Consensus from 2 of the American Healthcare analysts is that Digirad is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.4m in 2022. The company is therefore projected to breakeven around 2 years from today. 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 101% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Digirad's growth isn’t the focus of this broad overview, however, take into account that generally 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 Digirad is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Digirad's case is 58%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Digirad 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 Digirad 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 Digirad’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. 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.

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